My 2 year old son does this too. It seems to be a comfort thing, he twists his hair and then pulls a piece out, and he used to put the hair in his mouth. (It seems like this would hurt, but he doesn't mind). Last fall he had a patch on top that was pretty stubbly. From what I have read, it's actually pretty normal for a child to adopt this kind of comfort behavior. Some kids suck their thumb, some need a blankie, etc. Some kids do much stranger things than pull on their hair! They grow out of it eventually. I don't think there's anything you can do to stop it. I try not to worry about it. Their hair may be a mess, but they are happy and healthy, it could be much worse!