The black swan theory or theory of black swan events is a metaphor that describes an event that is a surprise (to the observer), has a major effect, and after the fact is often inappropriately rationalized with the benefit of hindsight.
The theory was developed by Nassim Nicholas Taleb to explain:
- The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology
- The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)
- The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs
Unlike the earlier philosophical "black swan problem," the "black swan theory" refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.
Read more about Black Swan Theory: Background, Identifying A Black Swan Event, Coping With Black Swan Events, Epistemological Approach, Further Developments
Famous quotes containing the words black, swan and/or theory:
“Swing low swing low sweet sweet chariot.
Nothing but a plain black boy.”
—Gwendolyn Brooks (b. 1917)
“But all is changed, that high horse riderless,
Though mounted in that saddle Homer rode
Where the swan drifts upon a darkening flood.”
—William Butler Yeats (1865–1939)
“The theory [before the twentieth century] ... was that all the jobs in the world belonged by right to men, and that only men were by nature entitled to wages. If a woman earned money, outside domestic service, it was because some misfortune had deprived her of masculine protection.”
—Rheta Childe Dorr (1866–1948)