The Hot-Hand Fallacy: Cognitive Mistakes or Equilibrium Adjustments? Evidence from Major League Baseball

Brett Green () and Jeffrey Zwiebel ()
Additional contact information
Brett Green: Haas School of Business, University of California, Berkeley, Berkeley, California 94720
Jeffrey Zwiebel: Graduate School of Business, Stanford University, Stanford, California 94305

Management Science, 2018, vol. 64, issue 11, 5315-5348

Abstract: We test for a “hot hand” (i.e., short-term predictability in performance) in Major League Baseball using panel data. We find strong evidence for its existence in all 10 statistical categories we consider. The magnitudes are significant; being “hot” corresponds to between one-half and one standard deviation in the distribution of player abilities. Our results are in notable contrast to the majority of the hot-hand literature, which has generally found either no hot hand or a very weak hot hand in sports, often employing basketball shooting data. We argue that this difference is attributable to endogenous defensive responses: basketball presents sufficient opportunity for transferring defensive resources to equate shooting probabilities across players, whereas baseball does not. We then develop a method to test whether baseball teams do respond appropriately to hot opponents. Our results suggest teams respond in a manner consistent with drawing correct inference about the magnitude of the hot hand except for a tendency to overreact to very recent performance (i.e., the last five attempts).

Keywords: hot-hand fallacy; streakiness; behavioral economics; sports economics (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
https://doi.org/10.1287/mnsc.2017.2804 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:64:y:2018:i:11:p:5315-5348

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().