Tag Archives: Bell Curve

I’ve been reading Nassim Nicholas Taleb’s monumental work The Black Swan: the Impact of the Highly Improbable (2007).  It’s basically about how we are mistakenly wed to the idea of the Bell Curve, also known as the Gaussian Distribution, to describe the behavior of many modern social and cultural systems. While the Bell Curve is good at describing the approximate activity of physical systems, it totally fails when it comes to real-world scenarios and situations which are more characterized by fractal, non-linear statistical distributions. Think of the unexpected popularity of a movie or book, for example. Normalized Bell curves can’t account for these events. Their “tails” are not fat enough. In reality, extreme events happen more than our conventional models predict. Here is a passage I particularly liked:

“We are teaching people methods from Mediocristan and turning them loose in Extremistan. It is like developing a medicine for plants and applying it to humans. It is no wonder that we run the biggest risk of all: we handle matters that belong to Extremistan, but treated as if they belonged to Mediocristan, as an ‘approximation’.
Several hundred thousand students in business schools and social science department from Singapore to Urbana-Champaign, as well as people in the business world, continue to study ‘scientific’ methods, all grounded in the Gaussian . . .”