I think it’s reasonable that your unwillingness to Kelly bet more, say with your savings, is reflecting some conditions not being fully accounted for in your bets, like a lack of true risk neutrality due to a reasonable expectation of negative outcomes if you lost your bankroll. Not that you might still be too conservative, only I also expect the average person to be making what we could reasonably consider a rational choice to avoid going bust given the consequences of doing that which are otherwise not being factored in to these calculations.
reasonable expectation of negative outcomes if you lost your bankroll
One of the necessary conditions for the Kelly Criterion to be optimal is that losing your bankroll is infinitely bad, so a reasonable expectation of negative outcomes isn’t enough to deviate from Kelly.
I think it’s reasonable that your unwillingness to Kelly bet more, say with your savings, is reflecting some conditions not being fully accounted for in your bets, like a lack of true risk neutrality due to a reasonable expectation of negative outcomes if you lost your bankroll. Not that you might still be too conservative, only I also expect the average person to be making what we could reasonably consider a rational choice to avoid going bust given the consequences of doing that which are otherwise not being factored in to these calculations.
One of the necessary conditions for the Kelly Criterion to be optimal is that losing your bankroll is infinitely bad, so a reasonable expectation of negative outcomes isn’t enough to deviate from Kelly.