The Knowledge Project

Charlie Munger: The Psychology of Human Misjudgment [Outliers]

1360 snips
Nov 18, 2025
Explore why smart people make poor choices through Charlie Munger's insights on psychological tendencies. Discover how incentives shape our decisions and the influence of liking and disliking on judgment. Delve into the dangers of overoptimism and denial, and learn how envy impacts behavior. Munger discusses the importance of curiosity, fairness, and reciprocity in social dynamics. Understand how stress and authority can skew our thinking, and uncover the Lollapalooza tendency where biases amplify, presenting strategies for improved decision-making.
Ask episode
AI Snips
Chapters
Books
Transcript
Episode notes
INSIGHT

Incentives Explain Outcomes

  • Incentives shape behavior far more than we expect and often explain puzzling outcomes.
  • Charlie Munger: "Show me the incentive and I'll show you the outcome."
ANECDOTE

FedEx Solved Night Shift Slowdown

  • FedEx fixed slow night shifts by changing pay from hourly to per-shift completion.
  • Overnight productivity improved immediately after aligning incentives with desired outcomes.
ADVICE

Verify Advice Before Trusting

  • Avoid taking professional advice when it strongly benefits the advisor without verification.
  • Learn advisors' trade basics and double-check their recommendations objectively.
Get the Snipd Podcast app to discover more snips from this episode
Get the app