In The Black Swan: The Impact of the Highly Improbable, Nassim Taleb offers a definition of a black swan. Taleb writes:
an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact…. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
Black swans are the inevitable byproduct of complex adaptive systems. Think about the world as a collection of interactions between components that are generally predictable but not always.
Knowing the behaviours of the individual part can allow you to extrapolate the behaviour of the group most of the time. However it won't allow you to predict the behaviour of each interaction. Occasionally these interactions will produce something unexpected and result in non-linear and non-predictable behaviour.
One of the biggest mistakes that people make with black swans comes with a big impact. A lot of people think that when outcomes occur outside of their expectations that the result is a black swan. This reasoning causes the belief that the outcome could not have been foreseen, because they didn't foresee it. While this reasoning loop relaxes our brain and allows us to avoid feedback, it also ensures that we are not learning how the world really works. We become close minded.
Just because something is outside of our expectations does not make it a black swan.
Still Curious? Pair with Taleb's definition of Antifragile.