Skewness Preferences: Evidence from Online Poker

52 Pages Posted: 22 Jun 2022 Last revised: 29 Feb 2024

See all articles by Johannes Kasinger

Johannes Kasinger

Tilburg School of Economics and Management, Tilburg University; Leibniz Institute for Financial Research SAFE

Markus Dertwinkel-Kalt

University of Münster; Max Planck Institute for Research on Collective Goods

Dmitrij Schneider

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

Multiple version iconThere are 2 versions of this paper

Date Written: February 26, 2024

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 Attitudes,Choice under Risk, Skewness, Gambling

JEL Classification: D01, D81, G40

Suggested Citation

Kasinger, Johannes and Dertwinkel-Kalt, Markus and Schneider, Dmitrij, Skewness Preferences: Evidence from Online Poker (February 26, 2024). 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)

Tilburg School of Economics and Management, Tilburg University ( email )

Warandelaan 2
Tilburg, Brabant 5037 AB
Netherlands

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

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Dmitrij Schneider

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

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

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