For years, researchers have tried to prove whether or not the hot hand fallacy really exists. Some gamblers have claimed that they believe in the hot hand fallacy, as many said that when they get a hot hand, they’re more likely to go on a winning streak.
And although some NBA basketball players believe when they have the hot hand, they are more likely to make their next shot and the shot after that, it has been difficult to prove.
Joshua Miller and Adam Sanjurio, co-authors of the recent study “Surprised by the Gambler’s and Hot Hand Fallacies? A Truth in the Law of Small Numbers,” studied the hot hand debate. Sanjurio presented the findings at Chapman at a recent Economic Science Institute/International Foundation for Research in Experimental Economics Lecture Series.
Sanjurio said to toss a coin four times and write down the percentage of times it lands on “heads.” While many would assume the percentage would be 50 percent, the answer is actually 40 percent.
Wall Street Journal Online recently featured Miller and Sanjurio’s study and said ‘“The authors say their correction should alter years of thinking about the hot hand.”’
Miller and Sanjurio’s conclusion states,
“We find that in a finite sequence of data that is generated by repeated realizations of a Bernoulli random variable, the expected empirical probability of success, on those observations in the sequence that immediately follow a streak of success realizations, is strictly less than the true (fixed) probability of success.”
Learn more about the IFREE/ESI Lecture Series.