Preference for Skew in Lotteries: Evidence from the Laboratory

Luis Santos-Pinto (), Thomas Astebro and José Mata

MPRA Paper from University Library of Munich, Germany

Abstract: Using a laboratory experiment we investigate how skew in uences choices under risk. We find that subjects make significantly riskier choices when the distribution of payoffs is positively skewed, these choices being driven in part by the shape of the utility function but also by subjective distortion of probabilities. A utility model with probability distortion calibrated on laboratory data is able to explain why most gamblers in public lotteries buy only a small number of tickets.

Keywords: Risk; Skew; Gambling; Lab Experiment (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2009-06-09
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Preference for Skew in Lotteries: Evidence from the Laboratory (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17165

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