Wall Street’s Obsession With Games Teaches Players How to Win

Markets are deeply tied up with puzzles, wagers and games. Ask a hedge fund manager and a blackjack player how much money to put on a bet, and there’s a good chance they’ll both lean on a mathematical formula called the Kelly criterion. Ask a stock analyst if Nvidia Corp. is a buy, and she might remind you of economist John Maynard Keynes’ description of the market as a beauty contest where the judges have to guess whom the other judges will like best. Games can be tools for understanding what action to take amid complexity and uncertainty.

As the stories that follow ...