Skewness Preferences: Evicence from Online Poker

Dertwinkel-Kalt, Markus; Kasinger, Johannes; Schneider, Dmitrij


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



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

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