Mental Model: Bias from Self-Interest

Denial happens when we have a serious thought about reality but decide to ignore it. For example, discovering a dark spot on your skin that you want to ignore. Later, it becomes darker, and eventually, you may visit the doctor. Some denial may serve as a buffer to absorb the information, but once denial becomes the default coping mechanism, it can amplify our problems and cause harm.

The psychological effects of drug addiction and alcoholism can lead people to believe that they have remained in a respectable condition with good prospects even if they continue to deteriorate.

We go to great lengths to preserve our self-image, even when we engage in behaviours that are inconsistent with our inner self-image. We may use phrases such as "not telling the truth is not lying", "I didn't have the time" to justify our actions.

The drive to save face is so strong that it often overrules and contradicts the effects of rewards and punishments. We may ignore our moral compass and instead find rationales for the bad, but fixable, choices that we repeat when it suits us.

When we face a decision whose consequences are morally ambiguous, the first choice starts the process of entrapment. It leads us to justify our actions, which leads to further action in the wrong direction, which increases the intensity of our choice. This causes a vicious cycle of self-justification.

The implication is that if we don't draw the line, our habits and circumstances will do it for us.

We will do dumb things. However, we are not doomed to live in denial or keep trying to justify our actions. We can choose to correct our tendencies when we recognise them.

We can break the self-justification habit by reflecting on our behaviour and the reasons for our behaviour. Resisting the urge for self-justification is not easy, but it is much better than letting it cripple the integrity of our behaviours.

On a personal level, Charlie Munger suggests we should face two facts:

1. Correctable, but unfixed bad performance is bad character and may make more of itself and cause more damage.
2. In demanding places, like sports teams, excuses and bad behaviour will prevent progress.

On an institutional level, Munger suggests:

1. Building a fair, meritocratic culture and methods of handling people that build up morale.
2. Separate the worst offenders when possible.