Risk, Uncertainty and Expectation in Talmudic Literature

In any environment which allows for individual and group enterprise, some degree of risk as well as elements of uncertainty and expectation will be features of virtually every human endeavour. These three decision‐making categories are especially relevant where business enterprise is concerned. In modern economics those concepts have been subject to rigorous theoretical scrutiny as well as empirical investigation of their incidence and relevance in economic life. Analysis of risk, uncertainty and expectations is also a feature of Talmudic literature; this is explored in the light of modern economics. First, the Talmudic scholars showed considerable sophistication regarding the “risk” factor, called Zeyoona, as it is interrelated with the business phenomena of “profit” and“loss”. Second, their analysis of “uncertainty”displays an amazing degree of modernity in their approach to computation of uncertainties as well as in the methodology. Finally, there are points of contact between rational expectations theory and certain Talmudic emphasis in dealing with economic behaviour: management of the future through rational forecasting and awareness of the role of information in the formation of expectations.