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The curse of the Black Swan

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  • John Mueller
  • Mark G. Stewart

Abstract

When unexpected and emotion-engaging events become Black Swans and carry an ‘extreme impact,’ this derives not so much those qualities or from their intrinsic size or importance as from reaction, or overreaction, they generate; but one that is often as extreme and unpredictable as the event itself. Most consequential development in human history, however, stems not from such events, but from changes in thinking and behavior that are gradual and often little-noticed as they occur. In addition, when an unexpected, emotion-grabbing event becomes a Black Swan, the response is likely to become internalized, and getting people to re-evaluate through sensible risk analysis and risk communication is extremely difficult. As part of this, events that are aberrations are often unwisely taken instead to be harbingers – and continue to be so even in the face of repeated disconfirming evidence. An examination of the 9/11 response in the US illustrates these points.

Suggested Citation

  • John Mueller & Mark G. Stewart, 2016. "The curse of the Black Swan," Journal of Risk Research, Taylor & Francis Journals, vol. 19(10), pages 1319-1330, November.
    • Handle: RePEc:taf:jriskr:v:19:y:2016:i:10:p:1319-1330
    DOI: 10.1080/13669877.2016.1216007
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    References listed on IDEAS

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    1. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    2. Drezner, Daniel W., 2014. "The System Worked: How the World Stopped Another Great Depression," OUP Catalogue, Oxford University Press, number 9780195373844.
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