Many of you have probably heard of the Gambler’s Fallacy. This is where a gambler believes past independent events can affect a future outcome. If you want to read more, we discussed this fallacy in depth in our series on the hidden probabilities of Roulette. The Gambler’s fallacy has a converse however, the Hot Hand fallacy, and it is what we are going to analyze this week.
The term a “hot hand” was initially used in basketball to describe a basketball player who had been very successful in scoring over a short period. The notion is “If you have been winning, you are more likely to win again.” Like the Gambler’s fallacy, past independent events are thought to influence future outcomes. However, this fallacy can be sneaky. Suppose you are betting on a game of chance or sports outcomes and have been winning. Do you believe you are more likely to win again the next time you bet? The mentality is pervasive. When you go the casino with a bunch of friends and start winning a few bets in a row, it can be hard to rationally think about the hot hand fallacy!
Recently, we read an article claiming researchers had found proof that the Hot Hand actually existed and should be taken off the list of statistical fallacies immediately. However, after reading past the clickbait title, we found this analysis fascinating, both by the fact that the Hot Hand seems to exist and can increase a gambler’s odds, as well as the undertaking by the scientists to understand why it is so.
It does actually turn out that the Hot Hand fallacy still does not exist, as it was shown that winning-streak gamblers had an average loss of £1.0078 for each pound they bet while non-streaky gamblers had an almost identical average loss of £1.0077. However, it was also undeniable that winning-streak gamblers had better odds to win their next bet when compared to losing-streak gamblers. After some admirable detecting work, the scientists discovered the confounding variable - the type of bet gambled on next.
Gamblers with a winning streak, more often than not, placed bets with greater odds of winning. Meanwhile, gamblers on a losing streak placed bets with lower odds of winning, thinking they would win big and offset their losses. Naturally, these bets led to the circumstance where winning-streak gamblers were more likely to win their next bet.
An interesting example of the hot hand fallacy can be seen with the 2016 Cleveland Indians. From June 17 - July 2, the Indians did not lose. They were unbeatable. In fact, they set a franchise record for wins with 14. Many pegged them as the best team in baseball at the time and guaranteed of a serious World Series bid. We all know what Game 7 of the World Series last year thought of that winning streak though…
Initially, we were on board with supporting the Indians and riding their Hot Hand to a franchise if not league record. However, after delving into their actual schedule of those games, we changed our opinion regarding their ability to extend the streak. We postulated that the Indians would not break their franchise record and snap their win streak at 12 or 13 games. We also realized that their win streak did not mean they were the greatest team in the MLB. As discussed above with the gamblers on winning streaks, it is important to understand the context behind the streak.
The Indians started their winning streak by sweeping the Chicago White Sox, a team that finished fourth in the AL Central with a below .500 winning average. Next, the Indians swept the Tampa Bay Rays, a team that finished dead last in the AL East win an appalling .420 winning percentage. In context, the Cubs had a .640 winning percentage. Then the Indians swept the Tigers, a team that although finishing second in the AL Central, was at the time barely a .500 team. The Indians then swept the rebuilding Atlanta Braves, who finished last in the NL East with a .422 winning record. Sure, winning 12 games is not easy, but that schedule made it definitely a lot more probable. It could be argued that the Indians kept extending their winning streak because they played games where they had a higher chance of winning- games against poor teams.
Their next series was against the Blue Jays, a team at the time that was 6 games above .500 and rising quickly in the NL East. Since the Blue Jays were the first good team to play the Indians in the last 3 weeks, I disembarked from the Hot Hand train and thought that they would be the team to bring the Indians back down to Earth. Although this was true, it took until the third game of the series when the Indians had already clinched a new franchise record. Ironically, the hot hand mentality may have caused the Indians to win game 14 in a row. The second game against the Blue Jays took an astonishing 19 innings with 19 pitchers used between the two teams. The Indians ended up winning the game, to clinch the franchise record, and it can be argued that they wanted the win more than Blue Jays while also believing that they were unbeatable.
Although the Hot Hand is definitely a fallacy, maybe there was something about winning 13 games in row that gave the Indians the mental boost they needed to outlast the Blue Jays in a 19 inning marathon. What do you all think? Does the Hot Hand exist within the scope of professional athletes and athleticism? Or does the fallacy remain steadfast?
The SaberSmart Team