29.3 One topic investigated by behavioral economists but not covered in the text relates to how individuals assess probabilities of random events occurring repeatedly. The hot-hand fallacy is the fallacy that a randomly generated event is more likely to occur again if it has just been observed to have occurred multiple times. For instance, a poker player that has had a streak of “hot hands” might believe that he is on a winning streak and will again be dealt a “hot hand” in the next game. The gambler’s fallacy, on the other hand, occurs when people believe that once a randomly generated event has occurred, it is less likely to occur again. For instance, a lottery player might observe that a particular number has just won in a lottery and conclude that it is less likely that this number will win in the next run of the same lottery. (Note that neither part A nor part B of this exercise requires any material presented in Section B.)