Step 36 - The Sucker In The Room & The Lollapalooza Effect

This Lesson teaches us how to prevent cognitive biases taking advantage of us by recognizing and avoiding them.

We now live in a world where we are bombarded with 2,000 to 4,000 ads a day. We believe that we can be immune to them, but we are not, because the mind is like an iceberg which is 90% below the water.

In poker, when you play for 30 minutes in a room of people and if you don't know who the sucker is, than you are the sucker. And similarly there are sources at work, that try to take advantage of you.

As a countermeasure we must take control and take the horns of life and move them forward.

An easy "conscious" decision to not be the sucker in the room, doesn't mean that we aren't going to be, because there are up to 25 cognitive biases that work in the mind against us to persuade us (reward, punishment, liking, disliking, association, availability, pavlovian responses, delusion, senescence bias, chemical bias, etc. ).

Resistance against single cognitive biases might work, but many cognitive biases are working simultaneously and are almost irresistible and the only countermeasure of them is recognition and avoidance.

The Lollapalooza Effect, which has been coined by Charlie Munger, describes multiple cognitive biases working at the same time against us.

The effect is best seen in an auction, where it is said that you always loose. Because as you walk into an auction there is a person on stage (authority bias) who is counting down from 3 to 1 (creating scarcity and urgency) and people are competing for the same thing (social bias and social proof), which a thing you want (reward bias) and if we miss out it creates the pain bias.

This mixture of cognitive biases is called the Lollapalooza Effect.

We as individuals can stand the effect of one bias, but the collection of multiple cognitive biases is a force too powerful that are irresistible to the human mind. Which is why we have to avoid being in such a situation.

Never overestimate the will power, that is necessary to withstand persuading forces of media, value and believe systems.

Avoid those sources all together. Strengthen your mind by learning about them and sometimes when you see other people using them against you, flip it and use those techniques to convince those people yourself using those cognitive biases on them.

Before we start judging those effects as bad or good, we also need to put into perspective, that the world is a competitive place and only because someone is trying to take advantage of you, doesn't mean he is evil. Everybody you will meet has his own best interest at heart.

We shouldn't freak out about that everybody is trying to take advantage of us. Every organism is in competition. Even on a cellular level. Everybody and everything wants and we are willing to make other people suckers for it. Not because we are evil. But because we compete for what we want.

The philosopher Adam Smith verifies that the dynamic of competition is the force that makes the world move forward. And it is in our hand to put this philosophy into a worldview where everybody wins.

The message is easy, don't be the sucker.

There are people who make things happen, people who watch things happen and people who wonder what happens. Now you know at least, why things are happening that way they are, and you don't have to wonder anymore.

Questions

  1. What is a time you have thought everybody had your best interest in mind but instead you were the sucker in the room?

    I once worked with somebody who convinced me that doing work for his company would indirectly help our shared company, so I offered my services to his company. I thought he had "our" best interest at heart, but that it just needs time to come around. Turns out, his company grew and grew and the shared company didn't. End of sad story.

  2. What is an example of you being persuaded, and what was it that persuaded you?

    I saw an Owen Cook (association bias) video and there was a guy who threw a party (social proof) and as soon as he talked it was instantly clear, that this guy was very smart (liking bias). Thus I searched and found him and bought a course of him.

    I like smart people, which is what persuaded me to look him up.

  3. What do you think about the world not being so black and white?

    I feel that this statement makes reality on the one side easier to understand, but on the other hand more difficult to live, because suddenly you can't blame anyone anymore, which I believe might be difficult for some individuals to accept. Personally I have stopped seeing the world in "black or white" a while ago, but am still inclined to drop this belief, if it new evidence presents, that there are forces at work which truly are good and evil. For the moment I don't know of any.