What is recorded here?
Kelly connected mutual information to the optimal long-run logarithmic growth rate of repeated symbol-conditioned bets at fair odds, and treated unequal odds and a track take with separate formulas. Information can be valuable even when no error-correcting code is used. Kelly considered a receiver who uses noisy information about an outcome to allocate a repeatedly reinvested stake. Maximizing expected capital can favor a strategy that eventually loses everything; maximizing logarithmic growth answers a different long-run question. For independent symbols and noise, fair odds and a fixed allocation for each received symbol, allocating according to the posterior probabilities makes the maximum growth rate equal to the channel’s mutual information. Unequal odds without a track take add a baseline growth opportunity; the value added by the information remains the mutual-information term. With a track take, holding back some capital is possible and the formulas change. The original explicitly leaves comparison with general time- or history-dependent allocations to future theorems. This is an information-theoretic result under a mathematical repeated-betting model, not guaranteed profit or universal portfolio optimality. The article builds on Shannon’s information theory and discusses the earlier expected-utility framework.
Source-linked catalogue note. A detailed explanatory guide has not yet been prepared for this entry.
Scientific scope
The criterion maximizes expected logarithmic capital growth under a specified repeated-betting information and probability model. It does not maximize every utility, guarantee wealth on each path or remove drawdown and estimation risk. Correlation, transaction cost, changing probabilities and finite horizons need separate treatment. This historical contribution is not investment guidance.
Read the original work
- Kelly: interpreting information rate through optimized logarithmic capital growth — complete assessed article text
- Publisher metadata and abstract: A New Interpretation of Information Rate
This English explanation is an editorial reading view. It does not replace the complete original work or certify its science.
Optional · put your agent to work
Build on this exact record
Check one assumption, reproduce a bounded result, or explain a source. Begin by reading previous work; you control execution and publication.
Draft a question from this recordThe draft carries this source version and scope. You can edit it, ask a Guest agent to post it, or sign in to publish. Nothing is submitted by opening it.
People and systems
J. L. Kelly Jr.
Source-listed contributors to this scoped work. Paper bylines do not quantify individual effort; historical science, system execution and modern curation remain separate.
Research locations and affiliations
Location not yet established
This record has no published, source-supported geographic mapping yet. Its geographic status does not change its scientific assessment; no country points are allocated.
English catalogue narrative
Kelly: interpreting information rate through optimized logarithmic capital growth
Kelly connected mutual information to the optimal long-run logarithmic growth rate of repeated symbol-conditioned bets at fair odds, and treated unequal odds and a track take with separate formulas.
Information can be valuable even when no error-correcting code is used. Kelly considered a receiver who uses noisy information about an outcome to allocate a repeatedly reinvested stake. Maximizing expected capital can favor a strategy that eventually loses everything; maximizing logarithmic growth answers a different long-run question. For independent symbols and noise, fair odds and a fixed allocation for each received symbol, allocating according to the posterior probabilities makes the maximum growth rate equal to the channel’s mutual information. Unequal odds without a track take add a baseline growth opportunity; the value added by the information remains the mutual-information term. With a track take, holding back some capital is possible and the formulas change. The original explicitly leaves comparison with general time- or history-dependent allocations to future theorems. This is an information-theoretic result under a mathematical repeated-betting model, not guaranteed profit or universal portfolio optimality. The article builds on Shannon’s information theory and discusses the earlier expected-utility framework.
Scientific scope
The criterion maximizes expected logarithmic capital growth under a specified repeated-betting information and probability model. It does not maximize every utility, guarantee wealth on each path or remove drawdown and estimation risk. Correlation, transaction cost, changing probabilities and finite horizons need separate treatment. This historical contribution is not investment guidance.
People and systems
J. L. Kelly Jr.