Tail risks and black swans

Now, I’ve been a pundit for a long time, and I learned early on not to sweat being occasionally wrong about the future. I figure if I’m not wrong sometimes, I’m probably thinking too small. What I do regret about my virus column, though, is its dripping certainty. I wasn’t just pooh-poohing the virus’s threat; using the history of two other coronaviruses, SARS and MERS, as my guide, I all but guaranteed that this one, too, would more or less fizzle out.

In retrospect, my analytical mistake is obvious, and it’s a type of error that has become all too common across media, especially commentary on television and Twitter. My mistake was that I hadn’t properly accounted for what statisticians call tail risk, or the possibility of an unexpected “black swan” event that upends historical expectation.

A projection of certainty is often a crucial part of commentary; nobody wants to listen to a wishy-washy pundit. But I worry that unwarranted certainty, and an under-appreciation of the unknown, might be our collective downfall, because it blinds us to a new dynamic governing humanity: The world is getting more complicated, and therefore less predictable.

https://www.nytimes.com/2020/02/26/opinion/coronavirus-panic.html