1- What is a Black Swan event? 2- Does it ever make sense a priori to devote res
ID: 1205775 • Letter: 1
Question
1- What is a Black Swan event?
2- Does it ever make sense a priori to devote resources to preventing a black swan event? Explain.
3- Does it ever make sense a priori to devote resources to containing a black swan event should one occur? Explain.
4-Is human error different than a black swan event? Can human error lead to a black swan event?
5- If you were BP's executive and you were looking at the cost of a blowiut loss of 87% market value, possible bankruptcy, and so on, and you were determining whether to spend several million dollars providing redundancies- releif wells drilled at the same tim as the main well, how would you decide whether to spend the money?
Explanation / Answer
1) Black swan event is something that has happened out of surprise and just rationalized without handsight. The best example was financial meltdown of 2008 was a blackswan event
2) Rather than trying to predict black swan events, We must try to build robustness to address the problems arisisng out of it.
3) Same answer as 2
4) Yes human errors sometimes can lead to very surprising results, The best one happening right now is global warming which is melting away many ice-caps of the world
5) Relief opeartions must be the focus first, Even though you are looking at a very bad future putting a brave face and not bending with odds actually can help your company.
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