A player hits 9 of his last 15 threes. Is he a better shooter now, or just having a stretch? Regression to the mean is the reason to be careful before you pay for a hot streak. It doesn't say the streak must end, only that extreme results from small samples tend to look more ordinary next time. You'll learn a simple shrinkage formula that pulls a short-run rate toward a sensible baseline, and you'll work that 9-of-15 case by hand. The lesson also covers choosing the baseline well, and the situations where shrinking too hard backfires, such as a real role change or a proven elite shooter.
Learning objectives
- Explain regression to the mean and why a hot streak is not a new skill level.
- Shrink a small-sample rate toward a baseline with a prior weight, and work the 9-of-15 example.
- Name when shrinkage fails and how to test it on future data.
