Black Swans is the name given by Nicholas Taleb to events that are unexpected, very difficult, if not impossible, to predict, and leading to major changes which can be catastrophic. The fall of Communism and the dissolution of the Soviet Union are said to be black swans.

According to this theory, the main reasons why certain events are not predicted are:

  • The difficulty of imagining how one single event can induce such large effects
  • The probability of such an event taking place is very small
  • Psychological bias.

There have been several psychological explanations put forward to explain why we stay unprepared in the face of extreme events.

We tend to forget events that happened in the past and the disasters they may have brought about.

We do not believe these disasters will happen to us because our optimism prevails over realism.

The steps we take may not be sufficient.

It is thus important to define early areas of vulnerability as these are not included in decision theory. In other words, unknown unknowns such as unprecedented occurrences, are never taken into consideration, but should be.

The main reasons for these risks not to be taken into account are the following:

  • They are hard to imagine
  • We do not know how to cope with them.