Charlie Munger: The Complete Investor (Columbia Business School Publishing)

by Tren Griffin

You get a pilot and a co-pilot. The pilot is the authority figure. They don’t do this in airplanes, but they’ve done it in simulators. They have the pilot do something where the co-pilot, who’s been trained in simulators a long time—he knows he’s not to allow the plane to crash—they have the pilot do something where an idiot co-pilot would know the plane was going to crash, but the pilot’s doing it, and the co-pilot is sitting there, and the pilot is the authority figure. 25 percent of the time, the plane crashes. I mean, this is a very powerful psychological tendency. —CHARLIE MUNGER, HARVARD UNIVERSITY, 1995 People tend to follow people who they believe are authorities, especially when they face risk, uncertainty, or ignorance. Professor Cialdini described the authority tendency this way: “When people are uncertain … they don’t look inside themselves for answers—all they see is ambiguity and their own lack of confidence. Instead, they look outside for sources of information that can reduce their uncertainty. The first thing they look to is authority.”