Black Swan Events were introduced by Nassim Nicholas Taleb, a Lebanese-American essayist, scholar, statistician, and risk analyst in his 2001 book, Fooled by Randomness, in which he seeks to show that some extreme events are impossible to predict no matter how sophisticated the statistical model.
Taleb gave the Black Swan Event three attributes.
- It is an outlier that lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.
- It carries an extreme 'impact'.
- Human nature leads to explanations after the fact, seeking future predictability that is, in fact, impossible.
The idea of a black swan has actually been traced back to the Roman poet Juvenal who lived in the late 1st and early 2nd century AD. He coined the Latin phrase "rara avis in terris nigroque simillima cygno" ("a rare bird in the lands and very much like a black swan").
The black swan phrase became a common expression in 16th century London as a statement of impossibility. Because no one had ever seen a black swan it was assumed that they did not exist. Then in 1697, the Dutch explorer Willem de Vlamingh discovered black swans in Western Australia. The metaphor took on a whole new meaning. A single observation could upend any human system of thought, because in an instant the impossible can become a reality—like a black swan.