Skewness Preferences: Evicence from Online Poker
Abstract
We test for skewness preferences in a large set of observational panel data on online poker games (n=4,450,585). Each observation refers to a choice between a safe option and a binary risk of winning or losing the game. Our setting offers a real-world choice situation with substantial incentives where probability distributions are simple, transparent, and known to the decision-makers. Individuals reveal a strong and robust preference for skewness, which is inconsistent with expected utility theory. The effect of skewness is most pronounced among experienced and unsuccessful players but remains significant in all subsamples that we investigate, in contrast to the effect of variance.
Keywords
risk preferences, choice under risk, skewness, gambling
Cite as
Dertwinkel-Kalt, M., Kasinger, J., & Schneider, D. (2024). Skewness Preferences: Evicence from Online Poker. Games and Economic Behavior, 10977, 460–484.Details
Publication type
Research article (journal)
Peer reviewed
Yes
Publication status
Published
Year
2024
Journal
Games and Economic Behavior
Volume
147
Start page
460
End page
484
Volume
10977
Title of series
CESifo Working Papers
Language
English
ISSN
2364-1428
DOI
Full text