Philosophy

Biology

Statistics

Materials science

Range (aeronautics)

Economics

Data mining

Computer science

Genetics

Physics

Streak

Database

Sequence (biology)

Mathematics

Optics

Fallacy

Epistemology

Econometrics

Composite material

Measure (data warehouse)

Selection bias

Econometrica

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 streak 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 study are reversed.

Surprised by the Hot Hand Fallacy? A Truth in the Law of Small Numbers