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The hot hand fallacy re-examined: new evidence from the English Premier League

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  • Stephanie Parsons
  • Nicholas Rohde

Abstract

Previous studies have illustrated human misperceptions of randomness and resultant suboptimal decision-making with reference to the 'hot hand' or momentum effect in sport, the notion of serial dependency between outcomes. However, issues of omitted variables bias have plagued many due to a reliance on nonparametric techniques or basic regression models. This article examines across-game and within-game momentum in the English Premier League (EPL) football competition using fixed effects regressions to control for time-invariant heterogeneity in conjunction with traditional nonparametric techniques. Although the results show evidence of performance reversal following winning streaks, no such evidence is found for streaks of draws or losses or in goal-scoring performance within games. This suggests that momentum is better suited as a post hoc label of performance than a robust causal phenomenon.

Suggested Citation

  • Stephanie Parsons & Nicholas Rohde, 2015. "The hot hand fallacy re-examined: new evidence from the English Premier League," Applied Economics, Taylor & Francis Journals, vol. 47(4), pages 346-357, January.
  • Handle: RePEc:taf:applec:v:47:y:2015:i:4:p:346-357
    DOI: 10.1080/00036846.2014.969830
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    References listed on IDEAS

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    Cited by:

    1. Helmut Dietl & Carlos Gomez-Gonzalez & Cornel Nesseler, 2017. " Are women or men better team managers? Evidence from professional team sports," Working Papers 364, University of Zurich, Department of Business Administration (IBW).
    2. Philippe Meier & Maximilian Rüdisser & Raphael Flepp & Egon Franck, 2019. " Investigating the conditions for psychological momentum in the field: Evidence from men’s professional tennis," Working Papers 383, University of Zurich, Department of Business Administration (IBW).

    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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