Behavioral New World
March 1, 2025
On a roll
The NCAA (college) men’s basketball championship tournament runs from March 18 until April 7 this year; the women’s tournament starts March 19 and runs through April 6. Both “March Madness” tournaments are single elimination, meaning that when a team loses a game, it is out of the tournament with no chance of being crowned national champion.
Although many factors determine which team wins a game, one key factor is how well the players shoot. We can think of this as the percentage of shots that go in. It is not quite that simple because there are 2-point shots and 3-point shots in addition to free throws (each worth one point), but shooting percentage is a good first approximation.
A widely held belief in basketball is that players occasionally get a “hot hand,” a seemingly long, unbroken streak of shots that go in. Fans believe in the hot hand, TV commentators believe in the hot hand, players believe in the hot hand, and coaches believe in the hot hand. Like I said, widely believed.
Why is this important? From a coaching perspective, you want the player with the hot hand to shoot more, especially at critical times in the game. If the game is close at the end, coaches sometimes draw up plays designed to free up the player with the hot hand to take the decisive shot. That certainly makes sense, doesn’t it?
But what if the hot hand phenomenon is an illusion? An understandably famous article (link) published in 1985, “The Hot Hand in Basketball: On the Misperception of Random Sequences,” argues that the hot hand belief is a fallacy. The conceptual framework for their conclusion is that people generally do not understand the nature of randomness. This alleged misperception is a subset of our human ability to see patterns where none really exist.[1]
The basic idea is this: If you flip a fair coin frequently—analogous to taking a shot—you sometimes get streaks. The coin can turn up heads three, four, even five times in a row. But the streaks are created by a random process—the flipping of a coin that has a 50% chance of coming up heads. Streaks are expected! But they do represent the talent of the person flipping the coin and, by analogy, the skill of the shooter. (I discuss differential shooting skill below.)
When the authors of the “Fallacy” article looked at the data, they saw coin flipping. For example, a player who had a streak did not have a higher-than-expected chance of hitting her next shot.
But, as I have written (most recently in my January 2025 newsletter link here), new evidence sometimes overturns previous results. And so it is with the hot hand phenomenon, as reported in the article, “A Cold Shower for the Hot Hand Fallacy.”
The article's authors use larger datasets (a benefit of the passage of time) and more nuanced analytical techniques (I’ll spare you the details). They conclude, “We find strong evidence of hot hand performance, both across data sets and within individuals across time. Moreover, in a study of beliefs, we find that expert observers can successfully predict which shooters get the hottest.”
And effect is not trivial: a player with a hot hand can be up to 11% more likely to hit her shot than expected. That could be a game-clincher!
There is less systematic evidence about the opposite effect, the cold hand. Anecdotally, I can report that I consistently had a cold hand when playing intramural basketball. But maybe that’s not really the cold hand; maybe I was a 20% shooter.
I can’t resist a “teaching moment,” so here’s a note on rules of thumb (also called heuristics):
Players’ shooting abilities are not all the same, not 50% as in the thought experiment above. Consider one shooter who can hit 60% of her shots while another shooter hits only 40%. Which one of them is more likely to have an apparent hot hand? Clearly the one who shoots 60%. So a coach who believes in the hot hand will usually pick the right player to shoot the critical, long-minute shot, whether or not there is a hot hand effect.
More generally, rules of thumb that are sufficiently effective will persist because they economize on the time and energy devoted to decision-making, not because they lead to the correct decision all the time.
Cautionary note: The recent findings do NOT imply that there are streaks in stock prices, although that is widely believed. See Chapter 4 of my book The Foolish Corner (available on Amazon) for a discussion.
Hot off the presses: I just found a paper (link) that finds evidence of a hot hand effect in the game show Jeopardy, but also reports that participants substantially over-estimate its effect. In what other venues outside of sports might we observe the hot hand effect?
[1] See my October 2023 newsletter, “Jesus’ picture on piece of toast?” (link)