007 wrote: "I don't understand the difference between the "certainty equivalent"
and the Kelly Criterion."
The Certainty Equivalent (CE) is derived from the Kelly Criterion, I believe Kelly introduced it in his paper on the subject. You can google it and find tons of information. It's big, very big, any serious gambler should get to know it. I don't claim to know everything there is to know about CE.
007 wrote: "Theoretically, just as each game as a whole should be analyzed
from a "Kelly" point of view, so should each strategy decision.
Sometimes, there are hands for which the hold with the highest
expected value takes a bigger bankroll to make than the game as a
whole takes to play."
Yes. One way to find the optimal Kelly strategy is to calculate the EV and VAR of each possible draw. To get maxEV you simply rank by EV. To get Kelly, you rank by CE.
Posted by: nightoftheiguana2000@yahoo.com
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