Maven Money Personal Finance Podcast 120 - Charlie Munger - The Psychology of Human Misjudgement
Aug 29, 2019
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Incentives Drive Real Behavior
- Incentives power behavior far more than good intentions or moral suasion.
- Changing pay structures often fixes systemic problems quickly.
Denial Warps Perception
- Psychological denial distorts facts when reality is too painful to accept.
- Denial causes persistent misjudgment even among otherwise sane people.
Advisor Bias From Incentives
- Advisors and professionals face incentive-caused bias that distorts recommendations.
- Systems that reward wrong actions create predictable, harmful behaviours.