Black Swans and Bayesian Belief (part 2)
To be robust against black swans, you must select subjective priors which has a relatively high probability of rare events. E.g. Mandelbrotian, not Gaussian. Otherwise, your inductive bias will lead you to believe that no rare events are possible.
This does not protect against other types of model error, “true black swans” that exist because your assumptions are wrong, but it reduces the probability of Gray Swans becoming Black Swans.