I’ve heard that adding oats to beer adds head retention. Is this true? If so, is there a formula for how much to use?
I believe Oats only add more of a creamy mouth feel and smooths out the flavor like in a stout rather than help the head of a beer. If your looking for something to stabilize your beer and help the head try some Carapils in your batch. About a pound or slightly less will do the trick depending on the grain bill and it will also add to the mouth feel and help out the body as well. At least it works for me. 
Anything with medium-weight molecular proteins should help head retention. Normally a little wheat will do it. Oats and other flaked grains can too. 1-3%. Don’t need much and you don’t want a flavor contribution.