Black Swan Theory

The Black Swan

The black swan theory refers to a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations.

The Black Swan: Quotes & Warnings that the Imbeciles Chose to Ignore - Early warning on banking risks.

• Taleb on Black Swans Podcast interview with Nassim Taleb at EconTalk
• Nassim Taleb's home page
• Edge article: The Opiates of the Middle Class

^ "Learning to Expect the Unexpected"

Limited human knowledge

Why do people tend to neglect rare events? Partly because humans underestimate their ignorance in most situations—the effect of unexpected events is far more significant than people often imagine. Taleb argues that the proposition "we know" is in many cases an illusion—the human mind tends to think it knows, but it does not always have a solid basis for this delusion of "I know". This notion that we do not know is very old, dated as far back at least as Socrates. Some felt^[who?] that the advancement of science has rendered the world well-known; Taleb argues that while science added knowledge, the world did not turn into a fictitious world where everything is known. Socrates' dictum "the only thing I know is that I do not know" is as true as ever, Taleb concludes. Taleb characterizes the trait, in part, as the Ludic fallacy.

-wiki