Simple Methods for Optimal Decision Making in Anticipation of Black Swan Events

Abstract

In recent years, Taleb and others consider black swan events can be catastrophic not only in organizational scale, but also at national scale. Therefore, methods to ancipate them, however it is deemed impossible, should be sought after. There is not a consensus among researchers on the level of predictability of a Black Swan event. Prof. Taleb (2007) believes that black swan events are unpredictable and highly improbable events which are inevitable in our world. And the only way for managing these types of incidents is to become anti-fragile and robust in order to become immune to prediction errors and protected from adverse events. Green (2011) partly supports this idea by stating that although these types of events are not predictable, organizations should prepare to be mounting an effective response while simultaneously dealing with the psychological impact of being shocked by an inconceivable event of staggering proportions.