Rational and Irrational Belief in the Hot Hand: Evidence from "Jeopardy!"

65 Pages Posted: 3 Jan 2025

See all articles by Anthony Kukavica

Anthony Kukavica

Stanford Graduate School of Business

Sridhar Narayanan

Stanford Graduate School of Business

Date Written: December 11, 2024

Abstract

For several decades, researchers and practitioners have wondered whether a "hot hand" exists in domains with repeated, human-controlled trials. Using a comprehensive play-by-play dataset from the game show "Jeopardy!", we demonstrate that contestants strongly believe in a hot hand effect as reflected in their wagering decisions during gameplay. In parallel, we find that a small hot hand effect also exists in contestants' actual performances. We then quantify contestants' "hot hand bias" (the degree to which their belief is irrational), finding that they overestimate the true effect by up to an order of magnitude. We also find that more successful contestants, as well as those with more quantitative and analytical training, exhibit lower levels of bias. Our paper reconciles robust findings of belief in a hot hand with a growing consensus that a small effect often exists in reality and investigates foundational mechanisms underlying these effects.

Keywords: hot hand, behavioral economics, quantitative marketing, judgment and decision making, behavioral finance, sports economics, biased beliefs

JEL Classification: D08, D84, D91, G04

Suggested Citation

Kukavica, Anthony and Narayanan, Sridhar, Rational and Irrational Belief in the Hot Hand: Evidence from "Jeopardy!" (December 11, 2024). Available at SSRN: https://ssrn.com/abstract=5062536 or http://dx.doi.org/10.2139/ssrn.5062536

Anthony Kukavica (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305
United States

Sridhar Narayanan

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9675 (Phone)

HOME PAGE: http://https://gsbapps.stanford.edu/facultybios/bio.asp?ID=409

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