Optimal nonmyopic gambling strategy for the generalized Kelly criterion

We consider the optimal wagers to be made by a gambler who starts with a given initial wealth. The gambler faces a sequence of two-outcome games, i.e., “win” vs. “lose,” and wishes to maximize the expected value of his terminal utility. It has been shown by Kelly, Bellman, and others that if the terminal utility is of the form log x, where x is the terminal wealth, then the optimal policy is myopic, i.e., the optimal wager is always to bet a constant fraction of the wealth provided that the probability of winning exceeds the probability of losing. In this paper we provide a critique of the simple logarithmic assumption for the utility of terminal wealth and solve the problem with a more general utility function. We show that in the general case, the optimal policy is not myopic, and we provide analytic expressions for optimal wager decisions in terms of the problem parameters. We also provide conditions under which the optimal policy reduces to the simple myopic case. © 1997 John Wiley & Sons, Inc. Naval Research Logistics 44: 639–654, 1997     

Planning versus Chaos in Clausewitz's On War

Clausewitz laid great emphasis on the planned construction of war, but this idea has received little attention from his commentators, who generally attach far greater importance to what he said about the chaotic elements of war, in particular its interactive nature and the friction inseparable from its conduct. This article gives long-overdue recognition to planning as a dominant theme of On War. The essential point Clausewitz makes concerning interaction is not that the enemy's responses are bound to disrupt our plans, but that our plans must aim to predict and incorporate his responses. Clausewitz acknowledges that friction creates enormous difficulties for the realization of any plan, but it is precisely in respect of this challenge that he develops the concept of military genius, whose capabilities are seen above all as the executive arm of planning.     

TRENDS AND MARKERS

The twin concepts of secrecy and transparency are central to any discourse on the freeness and fairness of elections, because they are universally accep ted yardsticks of the degree to which elections can be said to be legitimate. Without challenging this truism, this paper explores these concepts as both theoretical constructs and as manifes ted in empirical situations. It will highlight their ideological function and argue that they have an alienating effect in practice. The article will also attempt to show how secrecy and transparency have helped to shape Lesotho's electoral process and the mode of its management, and will also discuss the issues and questions that it raises. Next, the most critical issues in any debate concerning Lesotho's elections and their management are raised, followed by the recommendation of an ideal way of managing elections to serve the interest of voters better. Lastly, the paper demonstrates the danger of depoliticising elections and relegating them to the legal sphere, which only the courts of law are competent to interpret.     

Political influence on civil war mortality rates: The electoral college as a battlefield

This paper employs public choice analysis to explain certain kinds of military decision‐making during the Civil War. Specifically, the political costs and benefits which may have influenced policy with respect to casualty rates in the Union army are considered. A primary empirical finding is that electoral votes per capita are a strong explainer of casualties across Union states, all else equal.     

ALL TOGETHER NOW

Banning Weapons of Mass Destruction, by Frederick N. Mattis. Praeger Security International, 2009. 129 pages, $39.95.     

Defense Firms Adapting to Major Changes in the French R&D Funding System

The structural changes inside the French innovation system have impacted the role of defense firms since the late 1980s. Major changes have affected the defense budget and public R&D funding system in particular. The aim of this article is to understand French defense firms’ repositioning within the National Innovation System (NIS) based on an analysis of their R&D behavior over a long period of time (1987–2010). We show that French defense firms remain major players in the NIS and faced up to these major changes by adapting the funding of their R&D and their research priorities and rolling out new innovation capabilities. Additionally, they developed new innovation models to take advantage of new collaborative partnerships developed for civil and military markets.