1/ The Power of Incentives (Reinforcement) Principle:
Incentives shape human behavior, often much more than we realize. People respond strongly to incentives → consciously and unconsciously → positively and negatively "Show me the incentive. I'll show you the outcome"
Aligning incentives is crucial for achieving desired outcomes. This applies not only to money but also to social recognition, status, and the avoidance of negative consequences. Even those who understand the importance of incentives can underestimate their true power
2/ Psychological Denial Principle:
People often deny or distort reality when it's too painful to bear. [No Denial No Procrastination]
This defense mechanism can lead to significant misjudgments and opportunity costs as we discard what's most important to confront.
3/ Incentive-Caused Bias and Agency Costs Principle:
People tend to favor actions that benefit themselves, even at the expense of others, often rationalizing this behavior.
4/ Consistency and Commitment Bias Principle:
People tend to stick to their commitments and beliefs, even in the face of contradictory evidence. This hinders personal growth and learning. You gotta be open to new information and remain grounded.
5/ Pavlovian Association and Social Proof Principle:
People are strongly influenced by associations and the actions of others, rather than by absolute values — especially in uncertain situations. This leads to herd mentality and irrational decisions. so think independently
6/ The Pressure Cooker Principle:
Stress can trigger significant changes in mental function, impairing judgment and decision-making abilities. Charlie and Warren are great examples of avoiding stress and remaining cognitively sharp into their late 90s.
7/ Over-Influence by Authority Principle:
People tend to obey authority figures, even when it goes against their better judgment. This can have disastrous consequences, like in the Milgram experiment. Question authority & think critically, even when pressured to conform.
8/ Deprival Super Reaction Syndrome Principle:
People react more stronger to potential losses than to potential gains. This drives impulsive actions, and lead to irrational decision-making, such as holding onto losing investments or overreacting to minor setbacks.
9/ Envy/Jealousy Principle:
Envy and jealousy are powerful motivators, often driving people to act in ways they wouldn't otherwise. Leads to conflict and destructive behavior. It'll be helpful to identify these in others, but it's just as important to see them in yourself.
10/ Importance of "Why" Principle:
Understanding the reasons behind things is crucial for effective communication, learning, and decision-making. Simply knowing facts isn't enough. We need to understand the underlying principles and motivations to make informed decisions.
11/ The Lollapalooza Effect Principle:
The combination of multiple psychological tendencies can lead to extreme and irrational behavior. When multiple biases collide, their impact multiplies. Recognizing this helps identify when we're most at risk of making poor choices.
12/ The Fog of War Principle:
Poorly organized or unexplained information can lead to confusion, misunderstanding, and ultimately poor decision-making.
13/ The Gambling Trap Principle:
Variable reinforcement schedules are addictive. Avoid them. Gambling is addictive due to variable reinforcement schedules, where rewards are given unpredictably. This leads to a compulsion to continue gambling despite negative consequences.
14/ The Halo Effect Principle:
People favor those they like and their ideas, ignoring flaws. People tend to see those they like in a positive light, often overlooking their flaws and shortcomings.
15/ The Horns Effect Principle:
People avoid learning from those they dislike, even if beneficial. People tend to view those they dislike negatively, even dismissing their valid ideas or contributions.
16/ The Urge for Closure Principle:
People tend to quickly remove doubt by reaching a decision. Humans have a strong desire to quickly resolve uncertainty & reach decisions. This can lead to jumping to conclusions without considering all the evidence or alternative viewpoints.
17/ The Pull of the Status Quo Principle:
People are reluctant to change, even when it's beneficial. People naturally resist change and prefer to maintain the status quo, even when change would be beneficial. This can lead to missed opportunities and stagnation.
18/ The Thirst for Knowledge Principle:
Curiosity can lead to exploring unproductive or dangerous areas. While curiosity is generally positive, it can lead us down unproductive paths or into dangerous situations if not tempered with caution and reason.
19/ The Quest for Justice Principle:
People want things to be fair, even when it's not in their best interest. We have a strong desire for fairness and justice, even when it conflicts with our own interests. This leads to logically or economically suboptimal decisions.
20/ Availability-Misweighing Tendency Principle:
People overweigh information that is readily available or vivid. This means people are prone to neglect less obvious but potentially important data — and instead simply focus on what's vivid or readily available.
21/ Use-It-or-Lose-It Principle:
Abilities decline if not used. Skills and abilities deteriorate if not regularly used and practiced. This applies to mental skills as well as physical ones. We rarely do much about the deterioration until it's too late.
22/ The Addiction Crutch Principle:
Drugs and addictions can distort perception and behavior. Drugs and addictions can significantly alter perception, judgment, and behavior, leading to poor decisions and potentially harmful consequences.
23/ The Aging Mind Principle:
Aging can impair judgment. The wise are usually old, but the old aren't necessarily wise at all. In fact, as people age, their cognitive abilities naturally decline, which can lead to impaired judgment and decision-making.
24/ The Chatterbox Effect Principle:
People tend to talk nonsense to fill social space. People often engage in idle chatter or meaningless talk to fill social voids or avoid uncomfortable silences.
