Quote from: Oleander on September 25, 2013, 09:09:18 PM

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PROBLEM 2: Are we 100% confident that 1% max bet does in fact optimize profits over the long term given fair dice rolls (e.g., does the Kelly criteria consider the dynamic nature of the max bet size and the size of the gambler's bankroll)?

There is some disagreement on this. I've argued that the JD situation is different enough from the Kelly model that the 1% max bet is not necessarily optimal. And I think that Nakowa is evidence of this. Others think the Kelly Criterion is applicable, and all we need to do is wait for Nakowa to go bust.

It's a difficult question... probabilities are notoriously counter-intuitive.

Since we have people who believe in the Kelly Criterion despite our recent experience, maybe the best solution all around is to let investors set their max bet percentage individually. If the Kelly supporters are right, they'll prosper in the long run.

Thanks Oleander. Is there a thread where you argue your viewpoint on this?