Events

  1. Events
  2. 2016
  3. October
  4. Surprised by the Gambler's and Hot Hand Fallacies? A Truth in the Law of Small Numbers (with Joshua Miller)

Oct

12

Wednesday

Surprised by the Gambler's and Hot Hand Fallacies? A Truth in the Law of Small Numbers (with Joshua Miller)

3.00pm

Seminars

Public

Speaker: Professor Adam Sanjurjo (University of Alicante)

Series: Department of Economics Seminar Series 2016-17

We find a subtle but substantial bias in a standard measure of the conditional dependence of present outcomes on streaks of past outcomes in sequential data.

The mechanism is a form of selection bias, which leads the empirical probability (i.e. proportion) to underestimate the true probability of a given outcome, when conditioning on prior outcomes of the same kind.

The biased measure has been used prominently in the literature that investigates incorrect beliefs in sequential decision making---most notably the Hot Hand Fallacy and the Gambler's Fallacy.

Upon correcting for the bias, the conclusions of prominent studies in the hot hand fallacy literature are reversed. The bias also provides a structural explanation for how belief in the law of small numbers can persist, even in the face of abundant experience.

This seminar is part of the Department of Economics Seminar Series 2016-17. The seminars are open to all - no registration necessary.

Share this event

When & where

3.00pm - 4.30pmWednesday 12th October 2016

D111 Rhind Building City, University of London St. John Street London EC1R 0JD United Kingdom

Contact Details

Sotiris Georganas

Contact the organiser

Find us

City, University of London

Northampton Square

London EC1V 0HB

United Kingdom

Back to top

City, University of London is an independent member institution of the University of London. Established by Royal Charter in 1836, the University of London consists of 18 independent member institutions with outstanding global reputations and several prestigious central academic bodies and activities.