Evidence is adduced that the sages of the ancient Babylonian Talmud, as well as some of the medieval commentators thereon,
were well aware of sophisticated concepts of modern theories of risk-bearing.
Keywords and Phrases: Talmud, Risk aversion, Subjective value.
JEL Classification Numbers: B11, D80.
Received: April 10, 2002; revised version: May 7, 2002
RID="*"
ID="*"Presented at the Institute for Mathematical Studies in the Social Sciences-Economics, Stanford University, August 4,
1981. Subsequent to that presentation, the author's attention was drawn to an article by Zvi Ilani, “Models in the Economics
of Uncertainty: The Cost of Concluding a Conditional Contract, according to the Talmud and the Halachic Literature,” Iyunim Bekalkala (Investigations in Economics), The Israel Association for Economics, Jerusalem, Nissan 5740 (April 1980), 246–261 (in Hebrew). Inter alia, Ilani treats
the Talmudic passage that forms the subject of this paper, and provides a fairly comprehensive review of the medieval commentaries
thereon; undoubtedly, he was the first to recognize in print the relevance of this passage to modern economic theories of
uncertainty. It is not clear, though, whether or not his understanding of the passage agrees with ours. The current paper
appeared in January 2002 in the Research Bulletin Series of the Research Center on Jewish Law and Economics, Department of
Economics, Bar Ilan University.