| 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. |