Monday, 21 June 2010

black swan events

I've learned a new expression today, and with it a new concept. On ABC Radio's Counterpoint program this afternoon I was listening to three philosophers discuss Enlightenment Values in the Twenty- First Century , and one of the speakers referred to what I thought was a black swan effect.

Or maybe he referred to a black swan event.

It was immediately apparent that it meant a circumstance that wouldn't have been predicted, because no previous experience suggested such a thing was possible.

A quick look around the Net told me that it's a theory proposed by Nassim Taleb. Here's a brief quote from his work, posted on Wikipedia:
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. I stop and summarize the triplet: rarity, extreme impact, and retrospective (though not prospective) predictability. A small number of Black Swans explains 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.

Taleb says there's a 'nice summary' of his ideas at Arlene Goldbard's blog.

She finishes with these points:
Since we can’t control unpredictable events, we should accept uncertainty and seek to maximize our exposure to serendipity, as by putting ourselves in the way of new ideas.

Since there is such danger in accepting conclusions based on too little information simply because they confirm our beliefs, we should try to remain aware in the present of what we are doing, paying attention to what actually happens and refraining as far as possible from imposing theories on our experience.

We should recognize our poor record as a species in predicting the future, that we are much better at doing than knowing. Some things are more predictable than others: we are safe enough in expecting tomorrow’s sunrise to plan on breakfast. We can start noticing which situations are most susceptible to black swans, and when we encounter them, remember how little we truly know so our ignorance doesn’t lead us around by the nose.


Year of Finishing Off said...

I have heard this expression and liked it. Please don't mention the expression to a politician or to anyone in the media - it'll be bundled up into a cliche before you can say 'walk the talk, tipping point and at the end of the day'!

Mary said...

Parlance, I had heard this phrase last year on an episode of Numb3rs (I think that is its name). I noticed the phrase because of the Australian connection I suppose. He gave a brief summary of the meaning of the phrase which sounded pretty much what you have found.
I am always surprised when I see white swans, seeing that black swans are the norm here in Australia.

theregatha said...

Hi Parlance,
we often talk about "finding the black swan" when we are doing research. The basis being that when it comes to understanding theories we cannot know or predict anything 100%, and arose from the precept that all swans were white until they discovered the black swans in Australia.
Very interesting philosophy and quite a humbling reminder.

parlance said...

Finishing Off, talking of politicians...what a day today has been!

parlance said...

Mary, the weird thing about it is that in the past the phrase 'black swan' was the expression for an impossibility. (Did I already say that in the post? If so, put my repetition down to a bad memory.)

parlance said...

theregatha, the expression was quite new to me. Your explanation makes it even clearer. Now I'm wondering what other things we take for granted that might suddenly be surprisingly turned around.

Oh, wait...what about the idea that only men can be Prime Minister of Australia?