Optimizing Betting Strategies with the Kelly Criterion for Economic

Abstract

This comprehensive study explores the Kelly Criterion, a strategy devised for betting but with significant implications in economic decision-making and wealth management. The criterion, initially developed to maximize long-term growth in independent repeated bets with positive expected net returns, has evolved to encompass a broad range of applications. Through the use of mathematical modeling and probability theory, this research demonstrates how the Kelly Criterion can be effectively applied to enhance wealth accumulation. The societal benefits of this approach are manifold, extending to the reduction of problem gambling rates and promoting responsible gaming. The research also delves into the broader implications of the Kelly Criterion for society, suggesting that its judicious application can significantly shape the future of gambling as a recreational activity. By ensuring informed decision-making, the criterion benefits both individuals and society as a whole, offering a structured approach to managing financial risks and rewards. The expanded scope of this study highlights the versatility of the Kelly Criterion, showing its potential as a pivotal tool in modern economic scenarios, characterized by uncertainty and fluctuating financial markets.