If men define situations as real, they are real in their consequences. – Thomas theorem

a black swan

Posted in Today by bendyourcircuit on 30/05/2009

I push one step beyond this philosophical-logical question into an em­pirical reality, and one that has obsessed me since childhood. 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. Third, in spite of its outlier status, human  nature makes  us concoct explanations  for  its occurrence after the fact,  making  it explainable and  predictable.

The human mind suffers from three ailments as it comes into contact with history, what I call the triplet of opacity. They are:
a. the illusion of understanding, or how everyone thinks he knows what is going on in a world that is more complicated (or random) than they realize;
b. the retrospective distortion, or how we can assess matters only after the fact, as if they were in a rearview mirror (history seems clearer and more organized in history books than in empirical real­ity); and
c. the overvaluation of factual information and the handicap of authoritative and learned people, particularly when they create categories—when they „Platonify.“

nassim taleb, the black swan: the impact of the highly improbable

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