What it is
The hot-hand fallacy describes our tendency to believe that a successful streak is likely to lead to further success. For example, if a basketball player has made three consecutive shots, we may believe he has a greater chance of making the fourth than is actually likely.
Why it happens
The hot-hand fallacy occurs because we believe that small samples of data are representative of larger samples of data, when in reality, this is not the case. We often look for patterns in sequences and find it hard to properly understand randomness and chance, causing us to make predictions based on reasoning that is illogical.
Example 1 – The hot-hand fallacy increases with age
Many psychologists believe that the older we get, the more we rely on heuristics in our decision-making processes. Supporting this theory, evidence has shown that older people are more likely to be misled by the hot-hand fallacy when it comes to predicting the future performance of basketball players when they’ve had a successful streak.
Example 2 – The hot-hand fallacy has a stronger influence when people believe human skill impacts the outcome
The hot-hand fallacy is a heuristic that seems to contradict the gambler’s fallacy, because the hot-hand fallacy suggests future outcomes will be alike previous outcomes, whereas the gambler’s fallacy suggests future outcomes will be different to previous outcomes. The hot-hand fallacy may be caused due to increased confidence in our ability to predict what will happen when we have made a run of successful predictions. Alternatively, the gambler’s fallacy may be more likely to occur when we believe outcomes are only influenced by inanimate mechanisms, not human skill.
How to avoid it
As the hot-hand fallacy is in part caused by the incorrect belief in the law of small numbers, we can try and make predictions based on larger data pools. By using more data, it is more difficult to ‘find’ a pattern that doesn’t actually exist, meaning that our decisions are less likely to be influenced by fallacious reasoning.