Université de Lausanne
Faculté des
HEC
Département d'économétrie
et d'économie politique
Cahier de recherches économiques du DEEP No. 09.09
Thomas Astebro
José Mata
Luis Santos-Pinto
Preference for Skew in Lotteries: Evidence from the Laboratory
June 2009
Abstract
Using a laboratory experiment we investigate how skew inuences 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
JEL classification: D81; C91