Saturday, March 26, 2011

Lollapalooza of Books

"When several models combine, you get lollapalooza effects; this is when two, three, or four forces are all operating in the same direction. And, frequently, you don't get simple addition. It's often like a critical mass in physics where you get a nuclear explosion if you get to a certain point of mass -- and you don't get anything much worth seeing if you don't reach the mass." - Charlie Munger

I recently finished reading three books: Seeking Wisdom: From Darwin to Munger, Predictably Irrational and Moonwalking with Einstein. While each of these were dynamite as standalone reads, I think the value of combining the three creates a "lollapalooza" effect, similar to what Munger describes above.

As an illustration, Seeking Wisdom is an encyclopedia of valuable life lessons. My favorite chapter is about Munger's list of human biases. These biases are as follows:

1. Mere Association
2. Incentives
3. Self Interest / Self Dealing
4. Self Deception / Denial
5. Consistency
6. "Super-Deprival" Syndrome
7. Status Quo - Do Nothing Syndrome
8. Impatience
9. Envy / Jealousy
10. Contrast Comparison
11. Anchoring
12. Vivid Imagery
13. Abstract Blindness
14. Reciprocity
15. Bias from Liking
16. Social Proof
17. Authority
18. Sense-Making
19. Reason Respecting
20. Believe First, Question Latter
21. Memory Limitations
22. Do-Something Syndrome
23. Say-Something Syndrome
24. Emotional Arousal
25. Stress
26. Chemical Influence
27. Lollapalooza Effects

While this list is not perfect, it's value lies in the fact that it provides a framework for understanding biases and predictable misjudgments. For example, as you read through Predictably Irrational, you start to realize that while the book is wonderful in its examples (which Seeking Wisdom draws from), Dan Ariely doesn't really take the next step in providing a conclusive map of biases.

To take it another step, once you memorize the biases from Seeking Wisdom, you also start to notice how some of the chapters in Predictably Irrational are in fact the result of multiple biases (lollapalooza) all running in the same direction (sometimes the same as in previous chapters but in a different form).

For example in Chapters 11 and 12, the student that takes an exam where each question answered correctly is rewarded with a token that is exchangeable for cash, may cheat because of incentives (#2), self-interest (#3) and abstract blindness (#13) (the tokens don't feel like your stealing cash but you still are). The student that doesn't cheat on the same test because they sign a document indicating they follow a fictitious moral code, has mere association (#1 ) and consistency (#5) biases working in their favor.

So where does Moonwalking fit in? The reason why I liked Moonwalking with Einstein, is because it provided a framework that makes it easier to memorize large (and small) chunks of data. In this case, I used the "method of loci" to memorize the list of Munger's biases a few weeks ago.

While I consider all three books "required" life reading, I would add the provision that Moonwalking should be required reading before starting high school. I wished I had known about these memory tools years ago.

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