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Hot Hand and Gambler's Fallacy in Teams: Evidence from Investment Experiments


  • Thomas St�ckl


  • J�rgen Huber


  • Michael Kirchler


  • Florian Lindner



In laboratory experiments we explore the effects of communication and group decision making on investment behavior and on subjects� proneness to behavioral biases. Most importantly, we show that communication and group decision making does not impact subjects� overall proneness to biases like gambler�s fallacy and hot hand belief. However, groups decide differently than individuals as they rely significantly less on useless outside advice from �experts� and choose the risk-free option less frequently. Finally, we document gender differences in investment behavior: groups of two female subjects choose the risk-free investment more often and are slightly more prone to the hot hand belief than groups of two male subjects.

Suggested Citation

  • Thomas St�ckl & J�rgen Huber & Michael Kirchler & Florian Lindner, 2013. "Hot Hand and Gambler's Fallacy in Teams: Evidence from Investment Experiments," Working Papers 2013-04, Faculty of Economics and Statistics, University of Innsbruck.
  • Handle: RePEc:inn:wpaper:2013-04

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    More about this item


    Hot hand belief; Gambler�s fallacy; Experimental finance; Experts; Team decision making;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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