What Drives Blindness from Black Swan Events?

from Dr. Nassim Taleb's  book, "Fooled by Randomness"

In his book, Taleb describes a black swan as an event that: Is so rare that even the possibility that it might occur is unknown. Has a catastrophic impact when it does occur. Is explained in hindsight as if it were actually predictable

Common Pitfalls

1. Focusing on preselected segments of the seen and generalizing from it to the “unseen” Result is CONFIRMATION BIAS
2. Fooling ourselves with stories that cater to human need to discern patterns and simplify with models – NARRATIVE FALLACY
3. Behaving as if the Black Swan does not exist – HUMAN NATURE
4. Mistaken assumptions about the odds of these events caused by the distortion of SILENT EVIDENCE and LUNIC FALLACY (game theory)
5. Focusing on a few well defined sources of uncertainty on too specific a list of BLACK SWANS (at the expense of others that do not easily come to mind).

Notes

We lack imagination and repress it in others (prologue)

Some kinds of definitive Closed Beliefs Need to Be Avoided 55

A series of corroborative events is NOT necessarily evidence. Once your mind is inhabited with a certain viewpoint, you will tend to only consider instances proving you to be right. Paradoxically the more information you have, the more justified you will feel in your views.  (demonstrated over and over in studies) 56-59

You know what is wrong with a lot more confidence than you know what is right 58

Post event we rationalize and reshape memories.  70-74

If your life came under serious threat, having survived it you retrospectively underestimate how risky the situation actually was. 113-118

SILENT EVIDENCE – Pervades history.  Don’t get input from the dead, failures, and most importantly “real hero’s” who prevent Black Swan’s.   We glorify those who left their names in the history books at the expense of those contributors about whom our books are silent. It serves to mask the randomness of “Black Swan’s” (for good and bad BS).  Prologue, 101-107

Governments are great at telling you what they did, but not what they did not do- a form of “phony philanthropy” helping people in a visible and sensational way without taking into account the unseen cemetery of invisible consequences (e.g., Katrina disaster help instead of cancer research). 111

The fact we got here by accident, doesn’t mean we should continue to take the same risks.

A nerd is simply someone who thinks exceedingly inside the box 125

LUNIC FALLACY – Assuming that statistics (game theory) applies to random events that can go out of control (e.g., stock market, earthquakes, flight testing). In real life you do NOT know the odds, you need to discover them. 127

We tend to underestimate the role of luck in life in general and overestimate it in games of chance 129

We are demonstratingly arrogant about what we think we know.   Reference the 98% certainty studies. That demonstrate the difference between what people actually know and how much they think they know 138-140

One main effect of information: impediment to knowledge (pg 144)

Humans are victims of an asymmetry in the perception of random events. We attribute our successes to our skills, and our failures to external events outside our control, namely to randomness.  Pg 152

“It’s tough to make predictions, especially about the future” Yogi Berra