A Primer and Frequently Asked Questions for 'Surprised by the Gamblers and Hot Hand Fallacies? A Truth in the Law of Small Numbers' (Miller and Sanjurjo 2015)

Abstract

This is a user-friendly aid to understanding the Hot Hand selection bias discovered in Miller and Sanjurjo (2015); "Surprised by the Gambler's and Hot Hand Fallacies? A Truth in the Law of Small Numbers." It attempts to address the most frequently asked questions, and draw out the connections to previous results. A table of contents is placed at the beginning to facilitate navigation.

Keywords: hot hand, hot hand fallacy, sampling-without-repacement, Simpson's Paradox, Berkson's Paradox, Penney's Game, overlapping words paradox, optional stopping, finite sample bias, Monty Hall

JEL Classification: C00, C1, C11