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Lumifer comments on Open Thread, Apr. 20 - Apr. 26, 2015 - Less Wrong Discussion

3 Post author: Gondolinian 20 April 2015 12:02AM

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Comment author: ciphergoth 21 April 2015 06:54:08AM 2 points [-]

If utility is logarithmic in wealth, the Kelly Criterion tells me the right size of stake to put on a given bet, given the odds offered, my subjective probability and my wealth. In practice, in the real world, what's the right number to plug into the "wealth" part of the equation? My current savings? My yearly salary? The value of my home minus the money owing on it?

Comment author: Lumifer 21 April 2015 06:35:05PM 2 points [-]

In practice, in the real world, what's the right number to plug into the "wealth" part of the equation?

The amount which you can afford to lose.

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