Mathematical and Quantitative Papers. A mixture of my lectures, & musings when I am bored, ranging from probability theory & quantitative finance to computational epistemology. Collected Published Papers (in One Volume) New Paper on Errors. Black swan theory. The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact 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 blind people, individually and collectively, to uncertainty and to a rare event's massive role 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. Background[edit] Taleb asserts:[8]
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