The Bird You Don’t Know
The “Black Swan” is a term coined by New York University Professor, Nassim Nicholas Taleb, and discussed at length in his book: “The Black Swan: The Impact of the Highly Improbable,” 2nd edition (Random House Trade Paperback 2007, 2010) ISBN 978-0-8129-7381-5
In his Prologue to “The Black Swan,” Taleb introduces the concept as follows:
“Before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence. The sighting of the first black swan … illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans … . “
“What we call here a Black Swan (and capitalize it) is an event with the following three attributes.”
“First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact (unlike the bird). Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”
“I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability. A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.”
In a footnote, Taleb makes it clear that he is focused not on the “possibility of the exception (black swan)” but rather on the “role of the exceptional event (Black Swan) leading to the degradation of predictability and the need to be robust to negative Black Swans and exposed to postive ones.” In his next footnote, he emphasizes that: “The highly expected not happening is also a Black Swan.”
[Italics in original; bold highlighting is mine. Quoted from pp. xxi-xxii of Prologue to Taleb, Nassim Nicholas, “The Black Swan: The Impact of the Highly Improbable,” 2nd edition (Random House Trade Paperback 2007, 2010) ISBN 978-0-8129-7381-5]To order the book go to: Amazon “The Black Swan”
More about author at: Nassim Nicholas Taleb
