Narrative fallacy

Narrative fallacy is the human tendency to impose coherent causal stories on sequences of events that may be random, independent, or structurally unrelated. The term was coined by Nassim Taleb to describe a specific cognitive distortion: we remember and believe in explanations that fit narrative templates, even when the evidence supports no such causal chain. A stock rises for three days, and we construct a story about market confidence; the patient recovers after a treatment, and we credit the treatment rather than regression to the mean. The narrative fallacy is not merely a psychological curiosity. It is an epistemic vulnerability that makes systems predictable in their blindness: we will always prefer a good story to a true one.