The Black Swan

ACKNOWLEDGMENTS

I derived an unexpected amount of enjoyment in writing this book – in fact, it just wrote itself – and I want the reader to experience the same. I would like to thank the following friends.

My friend and adviser Rolf Dobelli, the novelist, entrepreneur, and voracious reader, kept up with the various versions of this text. I also built up a large debt toward Peter Bevelin, an erudite and pure “thinking doer” with extreme curiosity who spends his waking hours chasing ideas and spotting the papers I am usually looking for; he scrutinized the text. Yechezkel Zilber, a Jerusalem-based idea-starved autodidact who sees the world ab ovo, from the egg, asked very tough questions, to the point of making me ashamed of the formal education I received and uncomfortable for not being a true autodidact like him – it is thanks to no-nonsense people that I am grounding my Black Swan idea in academic libertarianism. The scholar Philip Tetlock, who knows more about prediction than anyone since the Delphic times, went through the manuscript and scrutinized my arguments. Phil is so valuable and thorough that he was even more informational with the absence of comments than he was with his comments. I owe a big debt to Danny Kahneman who, in addition to the long conversations on my topics of human nature (and noting with horror that I remembered almost every comment), put me in contact with Phil Tetlock. I thank Maya Bar Hillel for inviting me to address the Society of Judgment and Decision Making at their annual meeting in Toronto in November 2005 – thanks to the generosity of the researchers there, and the stimulating discussions, I came back having taken away far more than I gave. Robert Shiller asked me to purge some “irreverent” comments, but the fact that he criticized the aggressiveness of the delivery, but not the content, was quite informational. Mariagiovanna Muso was the first to become conscious of the Black Swan effect on the arts and sent me along the right lines of research in sociology and anthropology. I had long discussions with the literary scholar Mihai Spariosu on Plato, Balzac, ecological intelligence, and cafés in Bucharest. Didier Sornette, always a phone call away, kept e-mailing me papers on various unadvertised, but highly relevant, subjects in statistical physics. Jean-Philippe Bouchaud offered a great deal of help on the problems associated with the statistics of large deviations. Michael Allen wrote a monograph for writers looking to get published, based on the ideas of Chapter 8 – I subsequently rewrote Chapter 8 through the eyes of a writer looking at his lot in life. Mark Blyth was always helpful as a sounding board, reader, and adviser. My friends at the DoD, Andy Marshall and Andrew Mays, supplied me with ideas and questions. Paul Solman, a voracious mind, went through the manuscript with severe scrutiny. I owe the term Extremistan to Chris Anderson, who found my earlier designation too bookish. Nigel Harvey guided me through the literature on forecasting.

I plied the following scientists with questions: Terry Burnham, Robert Trivers, Robyn Dawes, Peter Ayton, Scott Atran, Dan Goldstein, Alexander Reisz, Art De Vany, Raphael Douady, Piotr Zielonka, Gur Huberman, Elkhonon Goldberg, and Dan Sperber. Ed Thorp, the true living owner of the “Black-Scholes formula” was helpful; I realized, speaking to him, that economists ignore intellectual productions outside their club – regardless how valuable. Lorenzo Perilli was extremely generous with his comments about Menodotus and helped correct a few errors. Duncan Watts allowed me to present the third part of this book at a Columbia University seminar in sociology and collect all manner of comments. David Cowan supplied the graph in the Poincaré discussion, making mine pale by comparison. I also benefited from James Montier’s wonderful brief pieces on human nature. Bruno Dupire, as always, provides the best walking conversations.

It does not pay to be the loyal friend of a pushy author too close to his manuscript. Marie-Christine Riachi was given the thankless task of reading chapters in inverse order; I only gave her the incomplete pieces and, of those, only the ones (then) patently lacking in clarity. Jamil Baz received the full text every time but chose to read it backwards. Laurence Zuriff read and commented on every chapter. Philip Halperin, who knows more about risk management than anyone (still) alive, offered wonderful comments and observations. Other victims: Cyrus Pirasteh, Bernard Oppetit, Pascal Boulard, Guy Riviere, Joelle Weiss, Didier Javice, Andreea Munteanu, Andrei Pokrovsky, Philippe Asseily, Farid Karkaby, George Nasr, Alina Stefan, George Martin, Stan Jonas, and Flavia Cymbalista.

I received helpful comments from the voracious intellectual Paul Solman (who went through the manuscript with a microscope). I owe a lot to Phil Rosenczweig, Avishai Margalit, Peter Forbes, Michael Schrage, Driss Ben Brahim, Vinay Pande, Antony Van Couvering, Nicholas Vardy, Brian Hinch-cliffe, Aaron Brown, Espen Haug, Neil Chriss, Zvika Afik, Shaiy Pilpel, Paul Kedrosky, Reid Bernstein, Claudia Schmid, Jay Leonard, Tony Glickman, Paul Johnson, Chidem Kurdas (and the NYU Austrian economists), Charles Babbitt, plus so many anonymous persons I have forgotten about[64] . . .

Ralph Gomory and Jesse Ausubel of the Sloan Foundation run a research funding program called the Known, the Unknown, and the Unknowable. They offered their moral and financial help for the promotion of my ideas – I took the invaluable moral option. I also thank my business partners, coauthors, and intellectual associates: Espen Haug, Mark Spitz-nagel, Benoît Mandelbrot, Tom Witz, Paul Wilmott, Avital Pilpel, and Emanuel Derman. I also thank John Brockman and Katinka Matson for making this book possible, and Max Brockman for his comments on the draft. I thank Cindy, Sarah, and Alexander for their tolerance. In addition, Alexander helped with the graphs and Sarah worked on the bibliography.

I tried to give my editor, Will Murphy, the impression of being an unbearably stubborn author, only to discover that I was fortunate that he was an equally stubborn editor (but good at hiding it). He protected me from the intrusions of the standardizing editors. They have an uncanny ability to inflict maximal damage by breaking the internal rhythm of one’s prose with the minimum of changes. Will M. is also the right kind of party animal. I was also flattered that Daniel Menaker took the time to edit my text. I also thank Janet Wygal and Steven Meyers. The staff at Random House was accommodating – but they never got used to my phone pranks (like my trying to pass for Bernard-Henri Levy). One of the highlights of my writing career was a long lunch with William Goodlad, my editor at Penguin, and Stefan McGrath, the managing director of the group. I suddenly realized that I could not separate the storyteller in me from the scientific thinker; as a matter of fact, the story came first to my mind, rather than as an after-the-fact illustration of the concept.

Part Three of this book inspired my class lectures at the University of Massachusetts at Amherst. I also thank my second home, the Courant Institute of Mathematical Sciences of New York University, for allowing me to lecture for three quarters of a decade.

It is unfortunate that one learns most from people one disagrees with – something Montaigne encouraged half a millennium ago but is rarely practiced. I discovered that it puts your arguments through robust seasoning since you know that these people will identify the slightest crack – and you get information about the limits of their theories as well as the weaknesses of your own. I tried to be more graceful with my detractors than with my friends – particularly those who were (and stayed) civilized. So, over my career, I learned a few tricks from a series of public debates, correspondence, and discussions with Robert C. Merton, Steve Ross, Myron Scholes, Philippe Jorion, and dozens of others (though, aside from Elie Ayache’s critique, the last time I heard something remotely new against my ideas was in 1994). These debates were valuable since I was looking for the extent of the counterarguments to my Black Swan idea and trying to figure out how my detractors think – or what they did not think about. Over the years I have ended up reading more material from those I disagree with than from those whose opinion I share – I read more Samuelson than Hayek, more Merton (the younger) than Merton (the elder), more Hegel than Montaigne, and more Descartes than Sextus. It is the duty of every author to represent the ideas of his adversaries as faithfully as possible.

My greatest accomplishment in life is to have managed to befriend people, such as Elie Ayache and Jim Gatheral, in spite of some intellectual disagreements.

Most of this book was written during a peripatetic period when I freed myself of (almost) all business obligations, routines, and pressures, and went on meditative urban walks in a variety of cities where I gave a series of lectures on the Black Swan idea.[65] I wrote it largely in cafés – my preference has always been for dilapidated (but elegant) cafés in regular neighborhoods, as unpolluted with persons of commerce as possible. I also spent much time in Heathrow Terminal 4, absorbed in my writing to the point that I forgot about my allergy to the presence of strained businessmen around me.