Hot Hands and Cold Decks: On Fire Till You're Not

I hosted a panel "Hot Hands and Cold Decks" with Alex Botez, Xuan Liu & Nate Silver

Earlier this month, I hosted a star-studded panel at the MIT Sloan Sports Analytics Conference on Hot Hands and Cold Decks. HOT HANDS. Is that really a thing in poker? Absolutely. A hot run of cards or tournaments leads to more confidence and a larger bankroll, creating what’s often called the “Matthew Effect” where the rich get richer, on and off the table. If your hands are too cold at first, even a poker savant may not end up staying with the game.

Anyone who plays basketball, even for fun, even badly, is familiar with the hot hand effect. You miss a million shots in a row, and then all of a sudden you nail one after another. But this goes all the way to the top, as the hot hand phenomenon has a particularly fascinating history in sports analytics.

A 1985 paper by Thomas Gilovich, Amos Tversky and Robert Vallone first described the hot hand as a fallacy. They used data analysis, surveys and experiments to show that the “hot hand” was a myth and that a player on a hot streak was equally likely to miss the next shot as when he wasn’t on a streak. But further studies re-ignited the hot hand. Specifically, another paper by Joshua B. Miller and Adam Sanjurjo in 2018¹ showed that evidence for the hot hand theory was ironically in the original GTV paper. The flaw in the original math? The finitude of a game. At some point, the game ends and so a truly hot hand is under-represented in the data. Think about it this way. When you miss a shot, the streak ends. But when you finish on a streak, you could have kept winning.

As Daryl Morey, the Sixers President and co-founder of the conference explained it to me,² the hot hand effect exists but it may be smaller, and more complex, than we grasp intuitively. A hot hand effect is based on both muscle memory, and flow. That flow state allows athletes to lose themselves in the process. The more outcome obsessed we are, the worse we play. When we have a hot hand, we’re more wrapped up in the present, and that’s what makes the hand so hot.

The hot hand effect is often cancelled out by a tendency for “hot players” to take harder shots than usual. And thus another breakthrough was in realizing that the hot hand effect co-exists with another effect: over-confidence.

This could easily be about poker. We’ve all seen it. Whether it’s a new player or a pro, heaters happen. That one guy is running way over expectation, and just keeps winning. Confidence grows. Newer players on a heater will start experimenting with new moves. Bigger buyins. More optimistic call-downs. Trickier bluffs. Harder shots indeed.

I kicked off the Sloan panel with a different type of hot hand. Not the metaphorical hot hand. But actual pivotal poker hands from each panelists career, starting with Xuan Liu’s Global Poker Award winning hand at the Lodge. In this one she was able to find a poker unicorn, getting one player to fold a better hand, while another called with a worse hand.

Lodge CEO Jake Abdalla requested that I roast The Kid who folded the flush, a personal friend of his who “hasn’t suffered nearly enough yet for this.”

We then moved to Alex Botez’s monster six figure pot against 17-time World Series of Poker Champion Phil Hellmuth. Millions of YouTube views later, her ace-nine offsuit moment has become legendary.

Finally, Nate Silver recounted a hand from deep in the WSOP Main Event, which showed him he was there to win, not just to survive. As he put it in his book “On The Edge.”

As I made my way back to the TV table following a break, a player named Shaun Deeb—a six-time WSOP bracelet winner—asked me what my objective was. Was I playing to survive, or was I playing to win? I was playing to win, I said. Half my opponents were so nervous that they could barely put a bet into the pot without knocking over their chips. But I felt a sense of clarity. Were the stakes high? Yeah. Once we’d gotten down to the final one hundred players, with the top prize of $12.1 million in sight, every pot was potentially worth hundreds of thousands of dollars in expected value. In fact, the stakes were so high as to be almost incomprehensible—which may have been helpful.

Nate’s flow state helped him to make a huge preflop call with Ace-Jack suited, propelling him to a healthy stack and a fighting chance to win the Main Event³.

As I reflected on the panel, and the hands discussed, I realized that each story had a moment of reversal.

• Xuan has crushed in countless streamed games, but she joked that the Global Poker Award winning hand was more like a “perfect storm”, rather than a showcase of her most elite decision making.

• Alex Botez pointed out that now that she’s studied more poker theory, she may not make some of the calls she did in that debut high stakes appearance.

• In Silver's case, the adroit ace-jack suited call was immediately followed by a brutal cooler that eliminated him.

We want pivotal hands to tell a lasting story. That’s one of the aims of my poker podcast. But often the real story is a non story. As we look for a clear narrative on life, the truth is messy. A hot hand is a hot hand. But it doesn’t mean the next one will be. Better enjoy it while it’s burning.

Watch the entire panel below.

1. The 2018 paper: Surprised by the Hot Hand Fallacy? A Truth in the Law of Small Numbers. The authors also wrote another recent paper on the topic, A Cold Shower for the Hot Hand.

2. A book by Ben Cohen, Hot Hand: The Mystery and Science of Streaks, comes highly recommended by Daryl. As Cohen writes in the intro: “Is the hot hand real? Yes. But also no. It’s complicated.”

3. Spoiler alert: he did not win.