Economics - General

Game Theory and the Talmud

Today is Friday.  Every Friday at sundown, the Sabbath (the day of rest) begins for the Jews.  Observant Jews spent most of Friday night and Saturday praying, reading the Torah and other scholarly works, socializing, and of course eating.

Although the Talmud might seem to deal only with other-worldly matters, that is not always the case.  In certain places, the Talmud even deals with financial issues.

For instance, consider man owes debts of 100, 200, and 300, but dies with insufficient funds to pay everyone.

How should his estate be divided?

According to the Talmud, in the case when the estate size is 100, the Talmud awards 33 1/3 to each party (an equal share division).  In the case where the estate size is 300, the Talmud would award 50, 100, and 150 to each party (a proportional division).  In the case where the estate size is 200, however, the Talmud would award 50, 75, and 75.  Why is this the case?

Read the Mind Your Decisions game theory blog for the answer.


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