Charlie Munger – Cognitive Biases – Inconsistency-Avoidance Tendency

We tend not to behave in ways that are inconsistent with the beliefs we hold about ourselves.

Be careful about the beliefs you take on. We talked about this briefly in regards to integral theory with the post on Types.  Do you type yourself?  Do you read the attributes of the Cancer Astrology Symbol and take on those traits.  Do you read what successful traders do and label yourself as a successful trader?  According to a simplistic view of this bias, you would not behave in a way that would be inconsistent with a successful trader IF YOU TRULY believed you were. In my opinion, this is where it gets interesting.

We have the explicit and implicit selves and I believe we mainly have the tendency to avoid inconsistencies with the implicit self.  Let’s give an example. Ben tell everyone he wants to be a famous painter one day (explicit). However, even though he truly does want to be a famous painter his true belief is that he can’t.

When you talk to Ben he is vibrant, communicative and deeply passionate about painting.  He talks about all the things he could do and what he would do.  However, he goes home and watches T.V. Ben does not practice his craft of painting.  Why the discrepancy?  He truly does want to be a great painter at his core.  Here is where the bias comes in.

His core belief is that he can’t become a famous painter. So he acts according to that belief. He watches T.V. He hangs out with friends and avoids painting at home.  the implicit self, in my opinion, rules the day.

This bias also works on the positive side of things. If I believe myself to be a good person and I’m put in a position to question that moral, say by having to donate money to an animal charity. I am likely to donate. We all are.

In factor analysis, this is called the discrepancy function. It’s the difference between the original matrix and the reconstructed one.  I believe as human we work to minimize this function as best we can whether it helps us or hurts us.