Emergic: Rajesh Jain's Blog

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Learning to Expect the Unexpected

April 24th, 2004 · No Comments

Edge has a talk by Nassim Nicholas Taleb on the Black Swan:

A black swan is an outlier, an event that lies beyond the realm of normal expectations. Most people expect all swans to be white because that’s what their experience tells them; a black swan is by definition a surprise. Nevertheless, people tend to concoct explanations for them after the fact, which makes them appear more predictable, and less random, than they are. Our minds are designed to retain, for efficient storage, past information that fits into a compressed narrative. This distortion, called the hindsight bias, prevents us from adequately learning from the past.

Black swans can have extreme effects: just a few explain almost everything, from the success of some ideas and religions to events in our personal lives. Moreover, their influence seems to have grown in the 20th century, while ordinary events the ones we study and discuss and learn about in history or from the news are becoming increasingly inconsequential.

The puzzling question is why is it that we humans don’t realize that we don’t know anything about the significant brand of randomness? Why don’t we realize that we are not that capable of predicting? Why don’t we notice the bias that causes us not to realize that we’re not learning from our experiences? Why do we still keep going as if we understand them?

Tags: General

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