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Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers

Nassim Nicholas Taleb
NYU-Poly

October 18, 2009

Abstract:
The point of The Black Swan is that both empirical knowledge (i.e. extrapolating statistics) and a priori theories fail in the tails and it is vital to "robustify" against it using the concepts of "the fourth quadrant". The point has been garbled by members of the economics establishment that claim mistakenly "we know that" and "we know about fat tails" or "power laws". This is both wrong and not my point. The paper presents corrections to the misperceptions.

Keywords: Black Swan, Risk Management, Finance, Markets

JEL Classifications: D8, G11, G12, G13, N

Working Paper Series

Date posted: October 21, 2009 ; Last revised: November 10, 2009

Suggested Citation

Taleb, Nassim Nicholas Nicholas, Common Errors in the Interpretation of the Ideas of The Black Swan and Associated Papers (October 18, 2009). Available at SSRN: http://ssrn.com/abstract=1490769

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Contact Information

Nassim Nicholas Taleb (Contact Author)

NYU-Poly ( email )

Brooklyn, NY 11201
United States