nep-spo New Economics Papers
on Sports and Economics
Issue of 2024‒04‒22
one paper chosen by
Humberto Barreto, DePauw University

  1. Skewness Preferences: Evidence from Online Poker By Markus Dertwinkel-Kalt; Johannes Kasinger; Dmitrij Schneider

  1. By: Markus Dertwinkel-Kalt; Johannes Kasinger; Dmitrij Schneider
    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 preferences, choice under risk, skewness, gambling
    JEL: D01 D81 G40
    Date: 2024

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