Who Falls For The Hot Hand Fallacy
Lovin’ the fact that rank outsider, Prof Nudge, won this year’s Nobel economics prize. Proving perhaps that economists are as useless at predicting their own winners as they are our future prosperity.
On top of such delicious sales weaponry as friction costs, another of the manifold gifts Dr Richard Thaler also gives us is the basketball term, hot hand fallacy.
I know this because of his cameo in the movie The Big Short. At the casino tables, alongside Selena Gomez. An 87% chance her 21 hand should win …
It’s like the classic forecaster’s error that past performance is the over-riding determinant of the next outcome.
I wonder how close to the general concept of “form” in sport this is.
And if it is, then form has its place in b2b selling too.
Form feels more like a sustained level of performance looked at over a period of time. Where any lesser achievement gets outweighed by more successful ones. Even Bradman got an unusually high number of ducks (7 in 80 innings, or 8¾pc) whereas his career average dwarfs all others, at the famous 99.94 runs.
Whereas ‘hot hands’ seems to me more like a ‘streak’. Successive, unbroken high-performance appearances. And all streaks must end.
There’s always potential for something genuinely beyond your control to can come from nowhere and crush any perfect sales play. Don’t let it blemish your record.
So you likely would prefer your seniors, clients and peers to talk of you on a selling streak, but you remind them you aim rather to show top sales form. And if form dips, well, you can prove that’s temporary can’t you, as class is permanent.