In talmudic tort law, remuneration for damages must in many cases be paid in high-quality land. (As in most premodern economies, payment made in kind was more common than payment in cash.) A court thus places a price on the damages and then the responsible party must transfer to the plaintiff an area of his best land of equivalent value—rather than a larger area of lower-quality land. From the standpoint of classical economics, such a requirement is nonsensical, as Shlomo Zuckier writes:
[S]ince both fields are worth the same amount of money, what is the special preference for having [the tortfeasor] pay with the smaller, higher-quality field rather than the larger, lower-quality field? The standard answer given for this question is [that this] is preferable [from the paint of view of the plaintiff]. . . . In other words, a smaller, high-quality field costing $100 is more valuable than a larger, lower quality field of the same cost. . . .
A basic problem is posed to this approach from the perspective of economics [and] the concept of efficient markets. If a $100 high-quality field is worth more than a $100 low-quality field, why do they remain at the same price? Shouldn’t the high-quality field’s greater value be reflected by a correction in the markets such that it is now worth more than $100? . . .
It may be possible to resolve [this and similar] problems on the basis of a revolution in the study of economics that took place over the past half-century. Amos Tversky and Daniel Kahneman, two Israeli psychologists and scions of rabbinic dynasties, earned the Nobel Prize in economics in 2002 (received by Kahneman; Tversky was deceased by that point) on the basis of their research in the 1970s on behavioral economics. . . .
Kahneman and Tversky, approaching the field of economics from their backgrounds in psychology, took a new perspective on these issues. They pointed to all sorts of irrationalities that are built into the human psyche and raised the question of their significance for economics. For example, people are loss-averse, which means that people value not losing $5 more than they value earning $5, despite the fact that from an economic perspective these things are equivalent. [Furthermore, behavioral research suggests that] loss aversion is much stronger regarding their higher-quality assets than it is regarding their lower-quality assets. Therefore, although giving up either part of a field is of equal cost to the damager’s wallet, the cost to his psyche will be greater in the first case.