MIB: Rediscovering the Hot Hand

Basketball players can be streaky. When they are “in the zone” or “on a hot streak” the rim looks huge and it can be hard to stop them.

That was the conventional wisdom in basketball, until it was disproven in 1985 by Thomas Gilovich and Amos Tversky. Their paper showed that streaks appear to be more important than they really were, and it was merely a case of humans’ pattern recognition tendencies trying to impose order on what is essentially randomness. Only the math is complex and counter-intuitive and beyond the reach of the average hoops fan.

Until Joshua B. Miller and Adam Sanjurjo came along. They are professors the economics department at the University of Alicante, whose research interests include behavioral economics and decision theory. Their research on the statistical probability of streaks caused a massive stir in both economics, statistics, and basketball circles. It is now a paper published in the journal Econometrica, titled “Surprised By the Hot Hand Fallacy? A Truth in the Law of Small Numbers,” co-authored with Adam Sanjurjo. After Gilovich discussed the hot hand with us on MIB last year, Miller reached out to me and I was intrigued by his probability analysis.

Their research was on whether one’s probability of success increases (or not) after recent success of failure. Miller and Sanjurjo had been watching the NBA 3-point shooting contest when they decided to test the anti-hot hand theory.

Their insight was novel and breath-taking: When reviewing a basketball game or a session of coin flips retrospectively, selecting a shot(coin toss) after a streak means you are choosing from a smaller set of “hits” (heads). Back out those streaks, and the remaining misses outnumber the hits — the made shot or heads probability turns out to be not 50/50 but instead is about 40 percent. The probability theory behind it was somewhat unique — and opened up a new area of statistical research. When Miller and Sanjurjo first released the research, it caused a sensation in the press: ESPNWSJNYTNew YorkerVoxSlateForbesConversation, etc.

His favorite books are here; a transcript of our conversation is available here.

You can stream/download the full conversation, including the podcast extras on iTunesBloombergOvercast, and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast, and Bloomberg.

Next week, we speak with Michael Lewis on his latest projects . .  .