Skewness Preferences: Evidence from Online Poker

Markus Dertwinkel-Kalt, Johannes Kasinger and Dmitrij Schneider

No 10977, CESifo Working Paper Series from CESifo

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 (search for similar items in EconPapers)
JEL-codes: D01 D81 G40 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dcm, nep-rmg and nep-spo
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10977

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