+1. It’s important to understand that log(money) is the RESULT that Kelly showed, not an assumption he made. If you start with it as an assumption, you’re not “deriving” the Kelly equation, you’re just calculating it.
This result is what makes logarithmic utility so attractive as an assumption in OTHER kinds of utility modeling.
+1. It’s important to understand that log(money) is the RESULT that Kelly showed, not an assumption he made. If you start with it as an assumption, you’re not “deriving” the Kelly equation, you’re just calculating it.
This result is what makes logarithmic utility so attractive as an assumption in OTHER kinds of utility modeling.