Skewness preferences: Evidence from online poker

Markus Dertwinkel-Kalt, Johannes Kasinger and Dmitrij Schneider

No 351, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: We investigate what statistical properties drive risk-taking 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 "insurance" option and a binary lottery 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 individuals. We find that individuals reveal a strong and robust preference for skewness. The effect of skewness is most pronounced among experienced and losing players but remains highly significant for winning players, in contrast to the variance effect.

Keywords: Online Poker; Risk Attitudes; Risk Preferences; Choice under Risk (search for similar items in EconPapers)
JEL-codes: D01 D81 G40 (search for similar items in EconPapers)
Date: 2022
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:zbw:safewp:351

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