What do you mean by applying Kelly to the LMSR?
Since relying on Kelly is equivalent to maximizing log utility of wealth, I’d initially guess there is some equivalence between a group of risk-neutral agents trading via the LMSR and a group of Kelly agents with equal wealth trading directly. I haven’t seen anything around in the literature though.
“Learning Performance of Prediction Markets with Kelly Bettors” looks at the performance of double auction markets with Kelly agents, but doesn’t make any reference to Hanson even though I know Pennock is aware of the LMSR.
“The Parimutuel Kelly Probability Scoring Rule” might point to some connection.
Exactly. No need to put tunnels underground when it makes substantially more sense to build platforms over existing roads. This also means cities can expand or rezone more flexibly since you can just build standard roads like now and then add bridges or full platforms when pedestrians enter the mix. Rain, snow, and deer don’t require more than a simple aluminum structure.