Taivo Lints Blog

A book originally from 2007, about the importance of events that have very low probability of occurrence but very large impact if they do occur, and how to live so as to avoid being too seriously hit by the negative versions of such events (at least in the domains where it is possible), and how to benefit from the positive ones.

The discussed topics also include:

• the widespread misuse of Gaussian distributions in areas where they do not apply;
• confirmation bias (people tend to pick only the facts that support their theories);
• scalability of professions (to serve more clients, the shoemaker needs to spend more time making shoes, but a writer writes a book once and prints / sells copies without additional effort when demand increases, but then again the writer has much larger risk of the product being not wanted by anybody);
• empirical skepticism (systematic doubt plus preferring experiential knowledge to theorizing);
• asymmetry of confirmations (i.e., one confirmatory example should not increase your confidence in the general correctness of a theory very much, but one counterexample does decrease the confidence in the correctness of a theory a lot);
• falsifiability (instead of looking for confirmations, try to find cases that would prove your theory wrong);
• narrative fallacy (our tendency to create stories that connect and explain events, even if those events might not be causally connected in reality);
• how happiness depends on the frequency and size of positive or negative events, and how this dependence can reduce our eagerness to live so as to take advantage of rare but very large positive events;
• the problem of silent evidence (we mostly hear only from / of those people / objects that have succeeded / survived, and draw incorrect conclusions due to this bias in our data set);
• the problem that (mathematical) statistics is researched and taught mostly based on game problems that have strictly defined rules and known bounded outcome sets, but real problems do not have such constraints and require different approaches;
• the expert problem (while in some disciplines there exist true experts, in others there are only people whose position as "expert" is not justified due to their lack of abilities to really explain or predict things);
• how understanding fractals and power laws can help to reduce unpleasant surprises by rare powerful events, but still does not give us precise predictive instruments;
• and much more.

So, in general, "Black Swan" is a great book filled with important, interesting and useful ideas. However, there were two problems that somewhat decreased my satisfaction with it. Firstly, the tone of writing tends to be occasionally quite arrogant. For me the frequent outright bashing and ridiculing is a warning sign of a person who has not reached the level of mental maturity of balance and goodwill (note that by immaturity I do NOT mean playfulness which I value a lot, but being inconsiderate and egoistic; also, I know that such type of ridiculing is widely popular and entertaining for many people, and we even have a special word for it in Estonian - ärapanemine - that I do not know how to translate, but still I consider such behavior unpleasant). Secondly, while most of the main ideas in the book I easily and eagerly agree with, some of the examples were in my opinion either not applicable in given context or even contrary to the main ideas, and sometimes so much so that I felt it necessary to double and triple check my thinking ("the author cannot possibly make such mistakes?!"), but to no avail. Apart from the possibility of me misunderstanding something, I had a hypothesis that the arrogant tone and occasional inconsistencies are intentional, so as to really engage readers' minds and make them think, but unfortunately it is more likely that they are not.

All in all, I quite highly recommend this book, but only to people who think and analyze what they read instead of just "downloading" everything to their unquestioning brains.

More info at Amazon: http://www.amazon.com/dp/1400063515/

P.S. Thanks to Jan Dyre who gave this book to me!

P.P.S. If anybody organizes a discussion about this book (or, more generally, about the ideas it contains), I would be very happy to participate!