Based on empirical and experimental data which are in favor of prospect-theoretic “bounded rationality”, El-Gamal concluded that with this bounded rationality individuals will reach inefficient risk-trading solutions instead of efficient risk sharing ones, which means that prohibition of risk trading (Gharar) is efficiency enhancing (Al-Saati, 2003, p.3).
Reference: The Permissible Gharar (Risk) in
Classical Islamic Jurisprudence. Abdul Rahim Al-Saati (2003), J.KAU: Islamic Econ.,Vol. 16, No. 2, pp. 3-19 (1424 A.H / 2003 A.D)
