Is expected value all that matters? I have heard of the Kelly criterion but what should you do if you cannot allocate the optimal amount?(adsbygoogle = window.adsbygoogle || []).push({});

For example, if you have a 0.01% chance of winning $100,000,000 but a 99.9% chance of losing $10,000 and you could only bet once, would you accept the bet?

From a mathematical perspective, if the expected return is positive, as in the case above, should you always take the bet? If not why? How do you determine whether to bet or not from the information above (from a rational, statistical approach).

**Physics Forums - The Fusion of Science and Community**

Dismiss Notice

Join Physics Forums Today!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

# B How to determine when to take a bet?

Tags:

Have something to add?

Draft saved
Draft deleted

Loading...

Similar Threads - determine | Date |
---|---|

I How do I determine if improving a fit is significant? | Feb 10, 2018 |

I How to determine energy savings from weather and usage data | Jun 9, 2017 |

Determining Specifics of 20:80 Rule (Pareto) | Feb 2, 2016 |

Determine and filter Credibility of data | Dec 29, 2015 |

What determines the precision of uncertainties? | Apr 29, 2015 |

**Physics Forums - The Fusion of Science and Community**