  We prove that a subtle but substantial bias exists in a common measure of the
conditional dependence of present outcomes on streaks of past outcomes in
sequential data. The magnitude of this streak selection bias generally
decreases as the sequence gets longer, but increases in streak length, and
remains substantial for a range of sequence lengths often used in empirical
work. We observe that the canonical study in the influential hot hand fallacy
literature, along with replications, are vulnerable to the bias. Upon
correcting for the bias we find that the long-standing conclusions of the
canonical study are reversed.
