 |
| Charlie Munger to the left, Warren Buffet to the right. |
In a 1995 speech, Charlie Munger, the life-long investment partner of Warren Buffet, talked about the “Psychology of Human Misjudgment.”
Munger's 24-point treatise begins by observing that that there is a dramatic “under-recognition of the power of what psychologists call ‘reinforcement’ and what economists call ‘incentives.’” Munger notes:
Read the whole thing! Munger mentions Skinner 16 times, Pavlov 12, and operant conditioning three times.
Incentives are a double-edged sword, of course. You can incentivize people to do good and you can incentivize them to do evil as well.
Munger's 24-point treatise begins by observing that that there is a dramatic “under-recognition of the power of what psychologists call ‘reinforcement’ and what economists call ‘incentives.’” Munger notes:
Well you can say, ‘Everybody knows that.’ Well I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.
Read the whole thing! Munger mentions Skinner 16 times, Pavlov 12, and operant conditioning three times.
Incentives are a double-edged sword, of course. You can incentivize people to do good and you can incentivize them to do evil as well.
- Related Posts:
** Dog Training the Corporation
** Cheese and Choke Chains
.
No comments:
Post a Comment
All comments are moderated, and all zombies, trolls, time wasters, and anonymous cowards will be shot.
If you do not know what that means, click here and read the whole thing.
If you are commenting on a post, be sure to actually read the post.
New information, corrections, and well-researched arguments are always appreciated.
- The Management