Can a fair coin look colder after a head?
A fair coin does not remember its previous flip, yet a particular way of summarizing short sequences can make heads look less likely after heads. The catch is in the averaging. With three flips, averaging a proportion for each eligible sequence gives different weights from pooling all the transitions that follow a head.
Questions you could explore
- What should happen to a sequence with no flip following a head?
- Why do the two averaging methods answer different questions?
Start reading
- Joshua B. Miller and Adam Sanjurjo / author manuscript of Econometrica paperSurprised by the Hot Hand Fallacy? A Truth in the Law of Small Numbers
The three-flip table shows why averaging one proportion per eligible sequence differs from pooling every recorded transition.
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