Minimum Decision Cost for Operators

State discrimination with the aim to minimize the error probability is a well studied problem. Instead, here the binary decision problem for operators with a given prior is investigated. A black box containing the unknown operator is probed by selected wave functions. The output is analyzed with conventional methods developed for state discrimination. An error probability bound for all binary operator choices is provided, and it is shown how probe entanglement enhances the result.

The Bayes cost in the binary decision problem

The problem of quantum state discrimination between two wave functions on a ring is considered. The optimal minimum-error probability is known to be given by the Helstrom bound. A new strategy is introduced by inserting either adiabatically or instantaneously an impenetrable barrier. The insertion point, independent of the shape of the initial wave function, becomes a node. The resulting modified wave functions can be, if the initial functions are judiciously chosen, distinguished with a smaller error probability, and as a consequence the Helstrom bound can be violated under idealised conditions.

Reexamination of the optimal Bayes cost in the binary decision problem

The problem of quantum state discrimination between two wave functions of a particle in a square well potential is considered. The optimal minimum-error probability is known to be given by the Helstrom bound. A new strategy is introduced by inserting an impenetrable barrier in the middle of the square well, which is either a nodal or non-nodal point of the wave function. The energy required to insert the barrier is dependent on the initial state. This enables the experimenter to gain additional information beyond the standard probing of the state envisaged by Helstrom and to improve the distinguishability of the states. It is shown that under some conditions the Helstrom bound can be violated, i.e. the state discrimination can be realized with a smaller error probability.

Another look at the optimal Bayes cost in the binary decision problem

The problem of quantum state discrimination between two wave functions of a particle in a square well potential is considered. The optimal minimum-error probability for the state discrimination is known to be given by the Helstrom bound. A new strategy is introduced here whereby the square well is compressed isoenergetically, modifying the wave-functions. The new contracted chamber is then probed using the conventional optimal strategy, and the error probability is calculated. It is shown that in some cases the Helstrom bound can be violated, i.e. the state discrimination can be realized with a smaller error probability.

Application of the Kelly Criterion to Ornstein-Uhlenbeck Processes

In this paper, we study the Kelly criterion in the continuous time framework building on the work of E.O. Thorp and others. The existence of an optimal strategy is proven in a general setting and the corresponding optimal wealth process is found. A simple formula is provided for calculating the optimal portfolio for a set of price processes satisfying some simple conditions. Properties of the optimal investment strategy for assets governed by multiple Ornstein-Uhlenbeck processes are studied. The paper ends with a short discussion of the implications of these ideas for financial markets.