Monday, July 30, 2007

The Black Swan: The Impact of the Highly Improbable

A Black Swan is a highly improbable event with three principal characteristics: it is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random and more predictable than it was. The astonishing success of Google was a black swan; so was 9/11. Humans are hard-wired not to truly estimate risk, too vulnerable to the impulse to simplify, narrate, and categorize and not open enough to rewarding those who can imagine the 'impossible', such as emerging technologies.

1 comment:

  1. This is one of the best books I have read in the past year. The author's irreverent style makes it particularly engaging and fun. The chapter on the misapplication of Gaussian statistics should be read by all scientists to prompt them to question their routine assumptions about how reality works.