The Rule of Three: How the Third Event Signals the Emergence of a Streak

34 Pages Posted: 11 Jun 2013

See all articles by Kurt A. Carlson

Kurt A. Carlson

Mason School of Business, William and Mary; Georgetown University - Department of Marketing

Suzanne B. Shu

University of California, Los Angeles - Anderson School of Management

Date Written: June 10, 2013

Abstract

It is well established that people perceive streaks where they do not exist. However, little is known about what constitutes a streak in the mind of an observer. This paper proposes that the third repeat event in a sequence is pivotal to the subjective belief that a streak is occurring. In five studies, we find direct and indirect evidence that perceived streakiness plateaus with the third repeat outcome in a sequence. The evidence to support this rule of three comes from various domains, including: observation of randomly determined probabilistic outcomes, investment decisions in response to performance histories, and basketball shooting percentages.

Suggested Citation

Carlson, Kurt A. and Shu, Suzanne B., The Rule of Three: How the Third Event Signals the Emergence of a Streak (June 10, 2013). Available at SSRN: https://ssrn.com/abstract=2277130 or http://dx.doi.org/10.2139/ssrn.2277130

Kurt A. Carlson (Contact Author)

Mason School of Business, William and Mary ( email )

P.O. Box 8795
Williamsburg, VA 23187-8795
United States

Georgetown University - Department of Marketing ( email )

Washington, DC 20057
United States

Suzanne B. Shu

University of California, Los Angeles - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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