Statistics
Fat Tails
A statistical distribution where extreme events are more common than a normal (bell curve) distribution would predict. The 'tails' of the distribution are fatter, containing more probability mass.
Biological Context
Extinction events, earthquake magnitudes, and forest fire sizes have fat-tailed distributions—catastrophic events happen more often than expected. Fat tails mean that averages can be misleading and rare extreme events dominate long-term outcomes.
Business Application
Business has fat tails: bankruptcies, market crashes, and breakthrough successes happen more often than normal distributions predict. Planning for averages ignores the events that matter most.