Risk analysis and Black Swans: two strategies for de-blackening

Abstract

With his book The Black Swan: The Impact of the Highly Improbable, Nassim N. Taleb brought the Black Swan metaphor to the center of risk analysis debates. His main thesis is that the course of the world is determined by the sudden coming of a small number of high impact events whose occurrences are detectable only through hindsight. When relying on prediction, risk analysis is doomed to fail. The standard route of refutation and rehabilitation of predictive practices has been to oppose Taleb’s worldview. In this article, we develop an alternative route of refutation in which we separate Taleb’s claim of unpredictability from his worldview. Moreover, in our justification of the possibilities of predicting in a Black Swan world, we favor an extension of the Black Swan domain so that it includes unknown knowns in addition to unknown unknowns. The article advocates for a bridging of perspectives in which predicting not only involves the sphere of knowledge, but also the sphere of imagination, bringing the risk communication to the fore. Related to the analysis of extraordinary high-impact events, the merits of an imaginative perspective on prediction is illustrated by the terrorist attacks in Norway on July 22 2011, and some key challenges for further developing such a perspective within risk analysis are sketched.