Work

Skewness preferences: Evidence from online poker

Year: 2024

Type: article

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.

Source: Games and Economic Behavior

DOI: 10.1016/j.geb.2024.08.007

Authors: Markus Dertwinkel-Kalt, Johannes Kasinger, Dmitrij Schneider

Institutions: University of Münster, Max Planck Institute for Behavioral Economics, Tilburg University, Leibniz Institute for Financial Research SAFE, Heinrich Heine University Düsseldorf

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,540

Funders: Deutsche Forschungsgemeinschaft, Westfälische Wilhelms-Universität Münster