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Skewness preferences: Evidence from online poker

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  • Dertwinkel-Kalt, Markus
  • Kasinger, Johannes
  • Schneider, Dmitrij

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.

Suggested Citation

  • Dertwinkel-Kalt, Markus & Kasinger, Johannes & Schneider, Dmitrij, 2022. "Skewness preferences: Evidence from online poker," SAFE Working Paper Series 351, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:351
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    Keywords

    Online Poker; Risk Attitudes; Risk Preferences; Choice under Risk;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G40 - Financial Economics - - Behavioral Finance - - - General

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