Black Swans and Turkeys
You may not know it but yesterday you had a first hand lesson in one of the things that Nassim Taleb, author of the Black Swan and the forthcoming Antifragility, has tried time and again to explain—often to know avail.
The lesson took the form of the turkey on your family's dinner table.
Now from your point of view, the end of the turkey's days appears inevitable. But consider the turkey's point of view.
"Every single feeding will firm up in the bird's belief that it is the general rule of life to be fed every day the friendly members of the human race "looking out for its best interests," as a politician would say.
On the afternoon of the Wednesday before thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief," Taleb writes in the Black Swan.
In other words, it is very dangerous to believe that we can properly forecast the future based on past and present events.
There's another Taleb-style error that can be picked up here. With our knowledge of what happened to the bird, it no doubt looks obvious that this was the plan all along.
We can confidently pat ourselves on the back and say, "Of course! The dumb turkey should have asked why he was being fed, then he would have known his destiny."
The error here is that we are using our knowledge of what happened to project backward in time a pattern that would not have been available to the turkey.
There were plenty of possible outcomes from his daily feedings, plenty of motives for the farmer to feed him. We are fooled here by our post-hoc knowledge into confidence about our ability to forecast the future.
To put it differently, we're really making the same error as the turkey—supposing that the present and the past gives us more certainty about the future than it does. Actually, we're even dumber than the turkey.
We just heard about how the turkey was misled by the evidence into a bad forecast—yet we're insisting on forecasting ourselves. The turkey at least didn't know about bad forecasts. What's our excuse?
"In a way, all I care about is making a decision without being the turkey," Taleb writes.
It's harder than it seems.
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