Skewness Preferences: Evidence from Online Poker

53 Pages Posted: 22 Jun 2022

See all articles by Johannes Kasinger

Johannes Kasinger

Goethe University Frankfurt; Leibniz Institute for Financial Research SAFE

Markus Dertwinkel-Kalt

University of Münster

Dmitrij Schneider

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Date Written: June 21, 2022

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

JEL Classification: D01, D81, G40

Suggested Citation

Kasinger, Johannes and Dertwinkel-Kalt, Markus and Schneider, Dmitrij, Skewness Preferences: Evidence from Online Poker (June 21, 2022). SAFE Working Paper No. 351, 2022, Available at SSRN: https://ssrn.com/abstract=4142527 or http://dx.doi.org/10.2139/ssrn.4142527

Johannes Kasinger (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Leibniz Institute for Financial Research SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

Markus Dertwinkel-Kalt

University of Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

Dmitrij Schneider

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

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