Evidence of Hot-Hand Behavior in Sports and Medicine

This paper provides empirical evidence of hot-hand bias in two novel field settings: dart players' strategic choices, and physicians' decisions during childbirth. The “hot hand” is the notion that a person can enter a state in which her probability of success becomes higher than normal. “Hot-hand bias” refers to an exaggerated belief in the hot hand (whether it exists or not). First, I collect data of professional dart players from the 2016 World Darts Championship. The players are significantly more likely to hit after a successful shot, implying that players have a hot hand. Based on a precise estimate of the hot hand, I calculate the optimal strategy of a profit-maximizing dart player. I find that dart players are much more willing to take risks after a successful shot than what I calculate to be optimal. Second, I utilize 1.3 million hospital admissions for childbirth in New York State over 2010-2015. I find no evidence that physicians have a hot hand when performing obstetrical procedures. In the absence of hot hand, physicians are still 2% more likely to perform a C-section after a previous successful C-section. My empirical model includes physician fixed effects, and a large set of patient conditions that proxy for when a C-section is likely to maximize patient welfare. Across the two settings, robustness checks provide additional evidence consistent with decision-makers having a hot-hand bias. Generalizing the medical findings to the United States and assuming that the identified 2% increase in the C-section rate is unwarranted, the estimated health-care cost is $65 million per year.