march madness? underreaction to hot and cold hands in ncaa basketball · 2020. 7. 28. ·...
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![Page 1: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/1.jpg)
March Madness? Underreaction to hot and coldhands in NCAA basketball
Daniel F. Stone 1 Jeremy Arkes 2
1Bowdoin College
2Naval Postgraduate School
WEAI/NAASEJune 28, 2017
![Page 2: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/2.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 3: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/3.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 4: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/4.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 5: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/5.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 6: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/6.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 7: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/7.jpg)
Background
I 1985-2010: “There is no hot hand”
I ≥ 2010: ‘Of course there’s a hot hand. And a cold one too’
I But still a hot hand bias
I (tendency to overestimate positive serial correlation)
I (Ironically HH is mostly a function of psychology that BEpeople typically say is so important.. including HH bias..)
![Page 8: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/8.jpg)
New question: how prevalent is HH bias?
I Previous lit:
I Gambling markets (Brown and Sauer, 1993; Paul andWeinbach, 2005; Paul, Weinbach, and Humphreys, 2011)
I Finance: Jegadeesh and Titman (2001)
I Lab: Offerman and Sonnemans (2004); Massey and Wu(2005)
![Page 9: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/9.jpg)
New question: how prevalent is HH bias?
I Previous lit:
I Gambling markets (Brown and Sauer, 1993; Paul andWeinbach, 2005; Paul, Weinbach, and Humphreys, 2011)
I Finance: Jegadeesh and Titman (2001)
I Lab: Offerman and Sonnemans (2004); Massey and Wu(2005)
![Page 10: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/10.jpg)
New question: how prevalent is HH bias?
I Previous lit:
I Gambling markets (Brown and Sauer, 1993; Paul andWeinbach, 2005; Paul, Weinbach, and Humphreys, 2011)
I Finance: Jegadeesh and Titman (2001)
I Lab: Offerman and Sonnemans (2004); Massey and Wu(2005)
![Page 11: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/11.jpg)
New question: how prevalent is HH bias?
I Previous lit:
I Gambling markets (Brown and Sauer, 1993; Paul andWeinbach, 2005; Paul, Weinbach, and Humphreys, 2011)
I Finance: Jegadeesh and Titman (2001)
I Lab: Offerman and Sonnemans (2004); Massey and Wu(2005)
![Page 12: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/12.jpg)
New question: how prevalent is HH bias?
I Previous lit:
I Gambling markets (Brown and Sauer, 1993; Paul andWeinbach, 2005; Paul, Weinbach, and Humphreys, 2011)
I Finance: Jegadeesh and Titman (2001)
I Lab: Offerman and Sonnemans (2004); Massey and Wu(2005)
![Page 13: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/13.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 14: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/14.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 15: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/15.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 16: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/16.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 17: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/17.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 18: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/18.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 19: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/19.jpg)
Our paper
I Test for HH bias in novel context: NCAA tourney seeds
I Real-world committee with experience (10 ADs serving rolling5 yr terms), soft incentives
I If HH bias: hot teams over-seeded
I So, conditional on seed, hot recent performance predictsworse outcomes in tourney
I No bias: recent performance doesn’t predict tourneyperformance
I HH underreaction: hot recent performance predicts bettertourney
![Page 20: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/20.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 21: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/21.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 22: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/22.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 23: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/23.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 24: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/24.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 25: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/25.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 26: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/26.jpg)
Issues
I What are seeds supposed to be based on?
I NCAA (publicly released official) guidelines vaguely say “best”
I Media reports: starting in 2010, committee instructed toweight full “body of work” equally
I Prior to 2010: committee provided with separate stats onrecent (last 10) games
I No documentation of change. And even post-2010,committee does account for injuries. And could still be biased
I We do analysis for pre/post regime change (2001-09;2010-2016 samples)
![Page 27: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/27.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 28: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/28.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 29: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/29.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 30: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/30.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 31: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/31.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 32: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/32.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 33: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/33.jpg)
Issues, ctd
I Overreaction vs HH bias
I Do recent signals make committee overestimate hotness oroverestimate how good team is in general?
I Model...
I HH bias (“HH over/underreaction”): signals of recentchanges in team quality predict tourney performance
I Overreaction: signals of levels of team quality predict tourneyperformance
I Another issue: overreaction vs HH bias vs salience/inattention
![Page 34: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/34.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 35: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/35.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 36: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/36.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 37: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/37.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 38: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/38.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 39: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/39.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 40: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/40.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 41: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/41.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 42: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/42.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 43: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/43.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 44: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/44.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 45: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/45.jpg)
Variables
I Recent signals of level of team quality:
I score differences given priors for opponent (SD1)
I Avg team expected to beat team X by 15
I Team Y beats X by 20
I SD1 = 20 − 15 = 5
I Signals of recent changes in quality:
I 1) score diffs given priors for own team and opponent (SD2)
I Team Y expected to beat team X by 20
I Team Y beats X by 20
I SD2 = 20 − 20 = 0
I 2) changes in Sagarin ratings ∆SRT ,T−1
![Page 46: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/46.jpg)
Variables, ct
I More salient info:
I CT champ, CT games,
I win/loss vs score of all games,
I high profile conferences
![Page 47: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/47.jpg)
Variables, ct
I More salient info:
I CT champ, CT games,
I win/loss vs score of all games,
I high profile conferences
![Page 48: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/48.jpg)
Variables, ct
I More salient info:
I CT champ, CT games,
I win/loss vs score of all games,
I high profile conferences
![Page 49: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/49.jpg)
Variables, ct
I More salient info:
I CT champ, CT games,
I win/loss vs score of all games,
I high profile conferences
![Page 50: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/50.jpg)
Variables, ct
I More salient info:
I CT champ, CT games,
I win/loss vs score of all games,
I high profile conferences
![Page 51: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/51.jpg)
Models
I Use game-level and team-tourney level data
I Game-level: easier to control for characteristics of each team(in each game)
I Team-tourney-level: easier to control for serial correlationwithin tournament and bigger picture outcomes
![Page 52: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/52.jpg)
Models
I Use game-level and team-tourney level data
I Game-level: easier to control for characteristics of each team(in each game)
I Team-tourney-level: easier to control for serial correlationwithin tournament and bigger picture outcomes
![Page 53: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/53.jpg)
Models
I Use game-level and team-tourney level data
I Game-level: easier to control for characteristics of each team(in each game)
I Team-tourney-level: easier to control for serial correlationwithin tournament and bigger picture outcomes
![Page 54: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/54.jpg)
Models
I Use game-level and team-tourney level data
I Game-level: easier to control for characteristics of each team(in each game)
I Team-tourney-level: easier to control for serial correlationwithin tournament and bigger picture outcomes
![Page 55: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/55.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 56: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/56.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 57: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/57.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 58: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/58.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 59: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/59.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 60: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/60.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 61: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/61.jpg)
Models
I Game-level:
I regress binary Y = Win = 1 if higher seed wins on:
I X = higher seed recent performance (SD1/SD2/∆SR) - lowerseed recent performance, ...
I seed-round FEs, opponent seed-round FEs, seed diff FEs,home, earlier Sag ratings
I Team-tourney-level: regress Y = # team’s tourney wins on
I X = team’s recent performance vars, seed FEs, earlier Sagratings
![Page 62: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/62.jpg)
2001-09 Game-level results (LHS = higher seed win)
Table: All vars diffs (higher seed - lower seed). T = pre-tourney ratings.
(1)
∆SRT ,T−1 0.027(0.021)
∆SRT−1,T−2
∆SRT−2,T−3
∆SRT ,T−2
SRT−1 0.015***(0.005)
SRT−2
SRT−3
![Page 63: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/63.jpg)
2001-09 Game-level results (LHS = higher seed win)
Table: All vars diffs (higher seed - lower seed). T = pre-tourney ratings.
(1) (2)
∆SRT ,T−1 0.027 0.026(0.021) (0.022)
∆SRT−1,T−2 0.033(0.028)
∆SRT−2,T−3
∆SRT ,T−2
SRT−1 0.015***(0.005)
SRT−2 0.015***(0.005)
SRT−3
![Page 64: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/64.jpg)
2001-09 Game-level results (LHS = higher seed win)
Table: All vars diffs (higher seed - lower seed). T = pre-tourney ratings.
(1) (2) (3)
∆SRT ,T−1 0.027 0.026 0.027(0.021) (0.022) (0.022)
∆SRT−1,T−2 0.033 0.034(0.028) (0.028)
∆SRT−2,T−3 0.008(0.025)
∆SRT ,T−2
SRT−1 0.015***(0.005)
SRT−2 0.015***(0.005)
SRT−3 0.015***(0.005)
![Page 65: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/65.jpg)
2001-09 Game-level results (LHS = higher seed win)
Table: All vars diffs (higher seed - lower seed). T = pre-tourney ratings.
(1) (2) (3) (4)
∆SRT ,T−1 0.027 0.026 0.027(0.021) (0.022) (0.022)
∆SRT−1,T−2 0.033 0.034(0.028) (0.028)
∆SRT−2,T−3 0.008(0.025)
∆SRT ,T−2 0.032**(0.015)
SRT−1 0.015***(0.005)
SRT−2 0.015***(0.005)
SRT−3 0.015*** 0.018***(0.005) (0.006)
![Page 66: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/66.jpg)
2010-16 Game-level results (LHS = higher seed win)
(1) (2) (3) (4)
∆SRT ,T−1 0.060*** 0.062*** 0.061***(0.019) (0.019) (0.020)
∆SRT−1,T−2 0.040 0.041(0.029) (0.030)
∆SRT−2,T−3 -0.035(0.028)
∆SRT ,T−2 0.055***(0.018)
SRT−1 0.017**(0.007)
SRT−2 0.017**(0.007)
SRT−3 0.018** 0.020**(0.007) (0.007)
![Page 67: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/67.jpg)
2010-16 Game-level results (LHS = higher seed win)
(1) (2) (3) (4)
∆SRT ,T−1 0.060*** 0.062*** 0.061***(0.019) (0.019) (0.020)
∆SRT−1,T−2 0.040 0.041(0.029) (0.030)
∆SRT−2,T−3 -0.035(0.028)
∆SRT ,T−2 0.055***(0.018)
SRT−1 0.017**(0.007)
SRT−2 0.017**(0.007)
SRT−3 0.018** 0.020**(0.007) (0.007)
![Page 68: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/68.jpg)
Robustness etc
I Rd 1 only: slightly smaller pt estimates, insig
I Seeds 5-12: larger pt estimates, insig
I Evidence of effects declining in latter part of 2001-09time-frame
I Effects driven by higher-seeded team overrated when cold in01-09; by lower-seeded team underrated when hot in 2010-16
![Page 69: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/69.jpg)
Robustness etc
I Rd 1 only: slightly smaller pt estimates, insig
I Seeds 5-12: larger pt estimates, insig
I Evidence of effects declining in latter part of 2001-09time-frame
I Effects driven by higher-seeded team overrated when cold in01-09; by lower-seeded team underrated when hot in 2010-16
![Page 70: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/70.jpg)
Robustness etc
I Rd 1 only: slightly smaller pt estimates, insig
I Seeds 5-12: larger pt estimates, insig
I Evidence of effects declining in latter part of 2001-09time-frame
I Effects driven by higher-seeded team overrated when cold in01-09; by lower-seeded team underrated when hot in 2010-16
![Page 71: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/71.jpg)
Robustness etc
I Rd 1 only: slightly smaller pt estimates, insig
I Seeds 5-12: larger pt estimates, insig
I Evidence of effects declining in latter part of 2001-09time-frame
I Effects driven by higher-seeded team overrated when cold in01-09; by lower-seeded team underrated when hot in 2010-16
![Page 72: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/72.jpg)
Robustness etc
I Rd 1 only: slightly smaller pt estimates, insig
I Seeds 5-12: larger pt estimates, insig
I Evidence of effects declining in latter part of 2001-09time-frame
I Effects driven by higher-seeded team overrated when cold in01-09; by lower-seeded team underrated when hot in 2010-16
![Page 73: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/73.jpg)
2001-09 Conf tourney effects (LHS = higher seed win;switch to percentage points)
(1) (2) (3) (4) (5) (6)
CT Champ -4.558 -4.237 -5.817 -4.774 -5.619 -3.140(3.952) (3.661) (4.872) (5.072) (4.855) (12.415)
CT SD1 0.080 0.076(0.056) (0.082)
CT SD2 0.144* 0.130 0.023(0.084) (0.089) (0.229)
CT # W’s 1.898 0.172 0.783 1.893(1.733) (2.528) (1.843) (5.258)
Seed 5-12 X
![Page 74: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/74.jpg)
2001-09 Conf tourney effects (LHS = higher seed win;switch to percentage points)
(1) (2) (3) (4) (5) (6)
CT Champ -4.558 -4.237 -5.817 -4.774 -5.619 -3.140(3.952) (3.661) (4.872) (5.072) (4.855) (12.415)
CT SD1 0.080 0.076(0.056) (0.082)
CT SD2 0.144* 0.130 0.023(0.084) (0.089) (0.229)
CT # W’s 1.898 0.172 0.783 1.893(1.733) (2.528) (1.843) (5.258)
Seed 5-12 X
![Page 75: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/75.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(1)
CT Champion -5.405(4.929)
CT SD2 0.173*(0.087)
CT # Wins 0.388(1.928)
SD2 in last X (pre-CT) regular season gamesX=1 -0.103
(0.140)
# Wins in last X (pre-CT) regular season gamesX=1 5.959
(4.205)
![Page 76: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/76.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(1)
CT Champion -5.405(4.929)
CT SD2 0.173*(0.087)
CT # Wins 0.388(1.928)
SD2 in last X (pre-CT) regular season gamesX=1 -0.103
(0.140)
# Wins in last X (pre-CT) regular season gamesX=1 5.959
(4.205)
![Page 77: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/77.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(2)
CT Champion -5.771(4.919)
CT SD2 0.192**(0.084)
CT # Wins 0.42(1.886)
SD2 in last X (pre-CT) regular season gamesX=2 -0.128
(0.086)
# Wins in last X (pre-CT) regular season gamesX=2 7.565***
(2.416)
![Page 78: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/78.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(3)
CT Champion -5.931(4.710)
CT SD2 0.191**(0.085)
CT # Wins 0.854(1.870)
SD2 in last X (pre-CT) regular season gamesX=3 -0.035
(0.079)
# Wins in last X (pre-CT) regular season gamesX=3 6.138***
(1.744)
![Page 79: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/79.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(4)
CT Champion -6.297(5.301)
CT SD2 0.207**(0.088)
CT # Wins 0.994(2.099)
SD2 in last X (pre-CT) regular season gamesX=4 -0.04
(0.073)
# Wins in last X (pre-CT) regular season gamesX=4 4.341**
(2.015)
![Page 80: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/80.jpg)
2001-09 CT and reg. season effects (LHS = higher seedwin)
(5)
CT Champion -4.158(6.064)
CT SD2 0.292**(0.113)
CT # Wins -0.103(2.260)
SD2 in last X (pre-CT) regular season gamesX=5 0.008
(0.072)
# Wins in last X (pre-CT) regular season gamesX=5 2.024
(2.325)
![Page 81: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/81.jpg)
2001-09 Tourney-level horse race/kitchen sink (LHS = #tourney wins)
(1) (2) (3)
∆SRT ,T−2 0.152*** 0.160**(0.046) (0.073)
CT Champion -0.111 -0.117(0.171) (0.170)
CT SD2 0.007*** 0.003(0.003) (0.004)
CT # Wins -0.004 -0.01(0.058) (0.058)
Last 2 RS: SD2 -0.002 -0.006(0.003) (0.004)
Last 2 RS # Wins 0.201** 0.205**(0.076) (0.076)
![Page 82: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/82.jpg)
2001-09 Tourney-level horse race/kitchen sink (LHS = #tourney wins)
(1) (2) (3)
∆SRT ,T−2 0.152*** 0.160**(0.046) (0.073)
CT Champion -0.111 -0.117(0.171) (0.170)
CT SD2 0.007*** 0.003(0.003) (0.004)
CT # Wins -0.004 -0.01(0.058) (0.058)
Last 2 RS: SD2 -0.002 -0.006(0.003) (0.004)
Last 2 RS # Wins 0.201** 0.205**(0.076) (0.076)
![Page 83: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/83.jpg)
2001-09 Tourney-level horse race/kitchen sink by seed
Seeds: 1-8 5-12 9-16
∆SRT ,T−2 0.102 0.203* 0.093(0.141) (0.101) (0.067)
CT Champion -0.198 0.002 0.029(0.224) (0.191) (0.199)
CT SD2 0.012* -0.001 -0.003(0.006) (0.006) (0.004)
CT # Wins -0.07 -0.037 0.042(0.085) (0.088) (0.064)
Last 2 RS: SD2 -0.002 -0.006 -0.005*(0.007) (0.004) (0.003)
Last 2 RS # Wins 0.331** 0.136 0.072(0.127) (0.090) (0.077)
Adj R2 0.42 0.03 0.161N 285 287 288
![Page 84: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/84.jpg)
2001-09 Tourney-level horse race/kitchen sink by seed
Seeds: 1-8 5-12 9-16
∆SRT ,T−2 0.102 0.203* 0.093(0.141) (0.101) (0.067)
CT Champion -0.198 0.002 0.029(0.224) (0.191) (0.199)
CT SD2 0.012* -0.001 -0.003(0.006) (0.006) (0.004)
CT # Wins -0.07 -0.037 0.042(0.085) (0.088) (0.064)
Last 2 RS: SD2 -0.002 -0.006 -0.005*(0.007) (0.004) (0.003)
Last 2 RS # Wins 0.331** 0.136 0.072(0.127) (0.090) (0.077)
Adj R2 0.42 0.03 0.161N 285 287 288
![Page 85: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/85.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 86: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/86.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 87: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/87.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 88: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/88.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 89: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/89.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 90: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/90.jpg)
Overall magnitudes
I What are overall effects of bias on accuracy of seeds?
I Maybe effects nullify or are just ‘within’ seed or off by 1 seed
I Calculate ‘optimal’ seeds with and without incorporatingrecent performance
I Without: ∼ 30% of actual seeds off by ≥ 2 seed-lines
I With: ∼ 35% off by ≥ 2
![Page 91: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/91.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 92: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/92.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 93: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/93.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 94: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/94.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 95: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/95.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 96: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/96.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 97: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/97.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 98: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/98.jpg)
Concluding remarks
I College bball teams do get hot/cold heading into tourney
I Evidence of hot/coldness neglected in seeding teams bothbefore and (more so) after regime change (2010)
I Opposite of standard hot hand bias
I Conf. tourney overall performance and last 2-3 regular season*wins* key predictors
I (Wins indicates team-level confidence effect..)
I Inattention is likely big factor - lots of info for busy people toprocess
I But attention is endogenous - so inattention suggestsunder-appreciation of importance of hot/cold factors
![Page 99: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/99.jpg)
Concluding remarks
I Why has NCAA made this issue worse, not better?
I Maybe not so surprising ..
I The madness is very profitable !
![Page 100: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/100.jpg)
Concluding remarks
I Why has NCAA made this issue worse, not better?
I Maybe not so surprising ..
I The madness is very profitable !
![Page 101: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/101.jpg)
Concluding remarks
I Why has NCAA made this issue worse, not better?
I Maybe not so surprising ..
I The madness is very profitable !
![Page 102: March Madness? Underreaction to hot and cold hands in NCAA basketball · 2020. 7. 28. · Background I 1985-2010: \There is no hot hand" I 2010: ‘Of course there’s a hot hand](https://reader035.vdocuments.mx/reader035/viewer/2022071001/5fbd9b775a75c23cb422d2fa/html5/thumbnails/102.jpg)
Concluding remarks
I Why has NCAA made this issue worse, not better?
I Maybe not so surprising ..
I The madness is very profitable !