Systematic Mistakes

This is so key…

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An important differentiator between our selection process and the processes of the value managers we respect is the time and effort we spend on analyzing how psychological factors affect decision making.  A number of different factors cause people to systematically make mistakes in judgement – just to name a few:

1. People tend to think every new idea is a good idea.
2. Once someone has invested a lot of time researching an idea, he cannot view conflicting facts objectively.  Effort “becomes” reality.
3. People cannot accept that a decision they made in the past might have been a mistake and will distort the current reality to make the prior decision seem logical.
4. People illogically reciprocate very small gifts or favors.

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From The Psychology of Errors – Cook & Bynum, July 2007