The black swan theory or “theory of black swan events” has been developed by Nassim Nicholas Taleb to explain 1) the role of the disproportionate impact of high, unpredictable, and the rare occasions that go beyond normal expectations in history, science, finance, technology, (2) non-computability for a possible rare event the consequent use of scientific methods (due to the nature of probabilities small) and (3) and biases the psychological make people individually and collectively to the uncertainty blind and unaware of the role of large-scale rare event in the Historical Affairs. Contrary to earlier philosophical problem, “Black Swan”, and the black swan “theory” (capital) does not refer only to the unexpected events of this magnitude so great and their dominant role in history. Such events, considered extreme outliers, and role-playing games together much more than the regular events.
Background
Black swan events that were characterized by Nassim Nicholas Taleb in his book 2007 (revised and completed in 2010), and Black Swan. Student with respect to almost all the major scientific discoveries, and historical events, and artistic achievement as “Black Swans” - was not intended and unexpected. It gives the appearance of the Internet, personal computers, World War I, and the September 11 attacks as examples of black swan events.
Black Swan term and an expression of Latin - the oldest flag in the expression of the poet Juvenal, “A person is a rare quality, such as black swan” (”Rara Avis in nigroque simillima cygno Terris”, 6165). It was a common expression in London, Century 16 and the statement is impossible to describe, derived from the assumption that the world is the old ‘all swans must be white, because all the historical records of the swans, said that it had feathers.In White this context, the black swan was what was impossible, or almost impossible, and can be found. After the discovery of black swans in Western Australia in 1697 by the mission headed by Dutch explorer Willem de Vlamingh on the Swan River, in the long Raider to connote that may later be found impossible to exist. Notes that students write in 19 century, and John Stuart Mill, the use of black swan fallacy as a term to identify new fraud, but drawing only on the expression of London.
Writing in The New York Times, The student:
What we call here the black swan (and take advantage of it) is an event with the following three qualities. The first is an outlier, because they fall outside the scope of normal expectations, because nothing in the past can point to the possibility of convincing them. The second, which withstand the effects of extreme poverty. Thirdly, in spite of their non-standard, and human nature makes us fabricate explanations for the occurrence after the fact, which makes the interpretation and predictable. I stop and summarize the trio: a rare and high-impact, and retrospective (though not likely) the ability to predict. A small number of Black Swans explain almost everything in our world, the success of ideas and religions, to the dynamics of historical events, to elements of our personal lives.
Dealing with the events of Black Swan
The main idea in a book called not an attempt to predict black swan events, but to build a force against the negative talk and the ability to exploit the positive. Student claims that banks and businesses are very vulnerable to the events of Black Swan hazardous and are subject to losses beyond that predicted by the models flawed.
Student states that the event Black Swan depends on the observer which is used a simple example of what could be a surprise black swan to Turkey, not a surprise black swan of the butcher objective, and therefore should be “to avoid exposure to Turkey,” by identifying areas of weakness in order to “convert black swans white “.
Determine the black swan event
Based on the criteria the author:
1. This event is a surprise (to the observer).
2. This event has a significant impact.
3. After the fact, and rationalization of this event by the incident, as if it had been expected.
Knowledge-based approaches
Called black swan is different from the philosophical versions earlier of the problem, specifically in the theory of knowledge, as they relate to the phenomenon of specific experimental and statistical properties, which he described as “a problem in the fourth quarter.” Student is on the cognitive constraints in some parts of the areas covered in the decision-making. These restrictions are twofold: (sports) and experimental philosophy (known human cognitive bias). Philosophical problem and about the lack of knowledge when it comes to events are rare because this is not clear in samples of the past, and therefore require a priori strong, or what one might call the theory of extrapolation, based on events that are increasingly dependent on the theories of their own at a very small risk. In the fourth quarter, and knowledge of both uncertain and significant consequences, requiring more rigidity.
By the applicant of those dealing with the concept of improbable, like Hume, Mill, Popper and focused on the problem of induction in logic, specifically, to draw general conclusions from specific observations. Event called Black Swan has a central feature and unique, high-impact. Claim is that nearly all the subsequent events in history come from yet, but expected in later humans convince themselves that these events can be interpreted in hindsight (bias).
One problem, described by the ludic fallacy student, is the belief that non-random organization found in life is structured and random found in the games. This stems from the assumption that the sign may be unexpected by the induction of changes in the statistics based on previous observations, especially when it is assumed that these statistics represent samples from a bell-shaped curve. These concerns often are of great importance in the financial markets, where key players in the value of using models of risk, which implies a normal distribution, although the market returns are usually fat distribution in the tail.
More generally, decision theory, based on the universe fixed or model of possible outcomes, and ignores and reduces the impact of events that are “outside the model.” For example, a simple model of daily stock market returns, including the radical moves such as Black Monday (1987), but may not model the collapse of markets in the wake of the attacks of 11 September 2001. A fixed model is unknown “known”, but ignores the fact that unknown “unknown.”
Student notes that other distributions are not valid for use on the face of accuracy, but are often more descriptive, such as the fractal power law, or are the distribution and that awareness of these may help to reduce expectations.
Beyond that, he emphasizes that many events are simply unprecedented, leading to undermining the basis of this kind of logic altogether.
A student says to use the counterfactual reasoning when considering the risks.
Students and the Ten Principles of Black Swan strong world
Census 10 students the principles of building systems that are robust to the events of The Black Swan:
1. What is fragile should the early break in while they are still small. And should not something ever become too big to fail.
2. Not socializing losses and privatizing the profits.
3. Should not be all that people were driving a school bus blindfolded (and crashed it) to be given new buses.
4. Do not let someone make the incentive, “” reward management nuclear plant - or the financial risks that are dealing with.
5. Balance complexity with simplicity.
6. Do not give children a dynamite stick, even if they come with a warning.
7. Ponzi schemes should only rely on trust. Governments should never need to “restore confidence”.
8. Do not give a drug addict more if he had a pain in the withdrawal.
9. Citizens should not depend on financial assets or non-infallible “expert” advice for their retirement.
10. Make an omelet with eggs broken.
In addition to these ten principles, students also recommends that the employment of physical and functional redundancy in the design of systems. Can be found on these two steps in the principles of flexibility in architecting. (Reference: Jackson, S. Architecting flexible systems: John Wiley & Sons. Hoboken,