On “Black Swans” and “Perfect Storms”: Risk Analysis and Management When Statistics Are Not Enough

Two images, "black swans" and "perfect storms," have struck the public's imagination and are used--at times indiscriminately--to describe the unthinkable or the extremely unlikely. These metaphors have been used as excuses to wait for an accident to happen before taking risk management measures, both in industry and government. These two images represent two distinct types of uncertainties (epistemic and aleatory). Existing statistics are often...