A Black Swan is Nassim Nicholas Taleb’s* term for an event that meets three characteristics:
- it happens rarely (perhaps it has never been observed before)
- it has an extreme impact, which can be positive or negative in consequence
- it is not predictable but in retrospect is easily explained
This type of risk is a problem for us humans because we are hardwired to see the normal or the average As a result, we get blindsided by Black Swans with surprising regularity. Taleb’s warning is that we need to be conscious of the potential for Black Swans in our risk
Examples: Taleb’s examples include the 9/11 terrorist attack, and the rise of Hitler and World War II.
* Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable, 2nd ed. (New York: Random House, 2010).« Back to Glossary Index