While poker theory is a relatively new field, modern economic theory
has been around for decades. The question "How do I maximize my
long-term profits in risky ventures?" has been answered with finality. You can use this calculator to find out just how much you should buy in for in a heads-up game.
Why choose a Kelly strategy? For starters, it completely negates the
concept of risk-of-ruin. The Kelly involves fluidly moving up and down
between limits, as dictated by your bankroll. If you go on a tear, you
will move up in limits. If you run bad, you are able to drop down.
Playing with a Small Bankroll
Bankrolling Finally Makes Sense
While poker theory is a relatively new field, modern economic theory
has been around for decades. The question "How do I maximize my
long-term profits in risky ventures?" has been answered with finality.
The Kelly Criterion, according to Chapter 24 of Chen and Ankenman's Mathematics of Poker,
will do better than any essentially different strategy in the long run.
Why choose a Kelly strategy? For starters, it completely negates the
concept of risk-of-ruin. The kelly involves fluidly moving up and down
between limits, as dictated by your bankroll. If you go on a tear, you
will move up in limits. If you run bad, you are able to drop down.
Risk-of-ruin calculations use the premise, "Assuming I will play $20
games until I am broke or robusto, what is the likelyhood that I will
one day be broke?" I would contend that this assumption is complete
horse shit on all counts, and kelly simply outperforms it on every
level.