Critical Mass, Length, Temperature Many systems and processes—whether in nature or society—can appear unchanging until they reach a certain transition point, after which their behavior shifts dramatically. Think of disease outbreaks, the spread of information in a network, or battery failures in electric vehicles. Let’s go through some examples. ...
What is it? Why is it interesting? Consider a toy example of a gamble. Someone offers you a game where a fair coin will be tossed: you will win 70% of the money you bet when heads comes up and lose 60% of the money you bet when tails comes up. Furthermore, you are offered the opportunity to play this game many times, although not arbitrarily often, say just once a day. Intuitively, this gamble seems favorable, especially when you are allowed to play it repeatedly. However, it becomes trickier when you ask yourself questions like, “How much of my total wealth should I bet?” and “What is the best strategy to maximize my long-term wealth, say over 10 years?” The Kelly Criterion provides the answer to these questions! ...