Texas Sharpshooter Fallacy - Definition
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Accounting, Taxation, and Reporting
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Marketing, Advertising, Sales & PR
- Business Management & Operations
- Economics, Finance, & Analytics
- Professionalism & Career Development
What is the Texas Sharpshooter Fallacy?
The Texas Sharpshooter Fallacy, commonly known as a clustering illusion or the hot hand fallacy, refers to the human tendency to analyze outcomes consisting of clusters in a random sequence of events as non-random. In simpler terms, it is the human tendency to see or even look for patterns in outcomes that are completely random.
Back to: Management & Organizational Behavior
A Little More on Texas Sharpshooter Fallacy
The Texas Sharpshooter Fallacy derives its name from a joke about a Texan who fires a volley of gunshots at the side of a barn and then paints a target centered on the tightest cluster of hits. The Texans subsequent claims of being a sublime sharpshooter.
We, as humans, are naturally inclined to carve order out of chaos, while conveniently disregarding or underpredicting variability in small samples of random data.
This inclination can mostly be attributed to the propensity of the human brain for pattern-recognition a cognitive process that is crucial for identifying spatial relations, remembering findings, and detecting resources as well as hazards.
The same gift can also create an undesirable bias in the human mind, resulting in a substantial impairment of its decision-making ability.
Such cognitive biases have manifested themselves in the form of poor decisions during sporting events, in the battlefield, and even during recreational activities such as gambling.
The Texas Sharpshooter Fallacy vs. Other Logical Fallacies
There are several logical fallacies that are analogous to the Texas Sharpshooter Fallacy. We describe these in brief below.
- The Gamblers Fallacy: Also known as the Monte Carlo Fallacy or the fallacy of statistics, the Gamblers Fallacy refers to the human tendency to believe that a random process becomes less random, and thus, more predictable, the more it is repeated. A gambler that has been consistently failing to get a particular number after several rolls of the dice during a game of craps may hold the irrational belief that the dice are somehow due to show his preferred number in subsequent rolls. This is obviously a false cause since every roll of the dice is a random event and its outcome is independent of previous outcomes. In finance, the Gamblers Fallacy is noticeable when investors assume that the probability of a share increasing or decreasing in price depends on its past performance. For example, let us assume that an investor tracking share prices of a particular company observes consistent high returns over a period of time. Now, although the high return outcomes are completely random, the investor may be led to believe that the stock price is somehow due for a decline after the initial phase of lucrative returns. As such, the investor would most likely decide to book profits or sell his shares altogether.
- The Broken Window Fallacy: The Broken Window Fallacy (sometimes also referred to as the glazier's fallacy) derives its name from the parable of the broken window, a logical fallacy introduced by the 19th century French economist, Claude-Frdric Bastiat. The parable goes as follows Suppose a child accidentally smashes a glass window pane, necessitating repair or replacement. Since the ensuing economic activities surrounding the repair or replacement of the window pane have benefited the glazier, Bastiat asks if destruction is actually good for the economy. The economist then proceeds to answer his own question by mentioning that since the glazier will have to be paid out of the disposable income of the childs father, it should be considered a maintenance cost which does not stimulate production. As such, the whole argument about destruction benefiting the economy is a logical fallacy.