Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Kelly Criterion

Betting more than the Kelly fraction increases the risk of ruin, especially in the long run.

https://en.m.wikipedia.org/wiki/Kelly_criterion

Note: Not saying that this is applicable in the original post's situation. It's relevant to the parent comment though, and very useful in many situations, such as investing.



What if I wanted to maximise the bottom 5th or 10th percentile of wealth?


Fractional Kelly?


Yes, precisely. Although that's more about bet sizing for optimal return in the long run, not quite about binary choice of whether or not to play. But conceptually bang on, I had it in mind




Consider applying for YC's Winter 2026 batch! Applications are open till Nov 10

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: