Posted by cadsmith on September 21, 2007
Reviewed The Black Swan, Taleb, 2007. This narrative presents a rule changer. It defines a black swan as either a very improbable event that occurs, or a very probable one that doesn’t. This is a new type of uncertainty having three features: rarity, impact, & retrospective probability. It is illustrated topologically as two regions. Mediocristan has a large sample which is impervious to the effects of events. Extremistan is where a single event changes the whole. The theme is about the problem of induction in four parts, the preference for anecdotal knowledge over empirical, the limits of prediction, generalizations from many rare events, & a proposal that the reader is a black swan. There is a derivation of fractal randomness described as gray swans. Added wiki reader notes.