Fat tail

'Fat tails' describes the greater likelihood of extreme conditions, than predicted by conventional models of probability.

This pattern is also known as 'leptokurtosis'.

This means that the likelihood - and size - of extreme negative events are systematically underestimated by conventional statistical models.

See also

• Black swan
• Frequency distribution
• Leptokurtic frequency distribution
• Leptokurtosis
• Normal frequency distribution
• Standard deviation
• Tail event
• Tail risk
• Tipping point