A Cold Shower for the Hot Hand Fallacy: Robust Evidence that Belief in the Hot Hand is Justified

IGIER Working Paper No. 518

47 Pages Posted: 15 Jun 2014 Last revised: 28 Aug 2019

See all articles by Joshua B. Miller

Joshua B. Miller

University of Melbourne - Department of Economics

Adam Sanjurjo

Universidad de Alicante - Fundamentos del Análisis Económico (FAE)

Date Written: August 24, 2019

Abstract

The hot hand fallacy has long been considered a massive and widespread cognitive illusion with important implications in economics and finance. We develop a novel empirical strategy to correct for several fundamental limitations in the canonical study and replications, conduct an improved field experiment to test for the hot hand in its original domain (basketball shooting), and gather all extant controlled shooting data. We find strong evidence of hot hand shooting in every dataset, including on the individual level. Also, in a novel study of beliefs, we find that expert observers \emph{can} predict (out-of-sample) which shooters are hotter.

Keywords: Hot Hand Fallacy, Hot Hand Effect

JEL Classification: C12, C14, C93, D03

Suggested Citation

Miller, Joshua B. and Sanjurjo, Adam, A Cold Shower for the Hot Hand Fallacy: Robust Evidence that Belief in the Hot Hand is Justified (August 24, 2019). IGIER Working Paper No. 518. Available at SSRN: https://ssrn.com/abstract=2450479 or http://dx.doi.org/10.2139/ssrn.2450479

Joshua B. Miller (Contact Author)

University of Melbourne - Department of Economics ( email )

111 Barry St.
Melbourne, VIC, 3053
Australia

HOME PAGE: http://joshua-benjamin-miller.com

Adam Sanjurjo

Universidad de Alicante - Fundamentos del Análisis Económico (FAE) ( email )

Campus de San Vicente
Alicante, 03690
Spain

HOME PAGE: http://sites.google.com/site/adamangelsanjurjo/

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