Surprised by the Hot Hand Fallacy? A Truth in the Law of Small Numbers
نویسندگان
چکیده
We prove that a subtle but substantial bias exists in a common measure of the conditional dependence of present outcomes on streaks of past outcomes in sequential data. The magnitude of this novel form of selection bias generally decreases as the sequence gets longer, but increases in streak length, and remains substantial for a range of sequence lengths often used in empirical work. We observe that the canonical study in the influential Hot Hand Fallacy literature, along with replications, are vulnerable to the bias. Upon correcting for the bias we find that the long-standing conclusions of the canonical hot hand fallacy study are reversed. JEL Classification Numbers: C12; C14; C18;C19; C91; D03; G02.
منابع مشابه
Surprised by the Gambler’s and Hot Hand Fallacies? A Truth in the Law of Small Numbers
We find a subtle but substantial bias in a standard measure of the conditional dependence of present outcomes on streaks of past outcomes in sequential data. The mechanism is driven by a form of selection bias, which leads to an underestimate of the true conditional probability of a given outcome when conditioning on prior outcomes of the same kind. The biased measure has been used prominently ...
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