Kiddushin, Chapter Four, Mishnah Twelve
This mishnah discusses the prohibition of yihuda man may not be alone in a room with a woman. Indeed, the mishnah assumes this prohibition is known and qualifies it in various ways. The reason for this prohibtion seems to be that the rabbis made two assumptions: 1) men cannot control their sexual urges and therefore they will attempt to have sex with any woman with whom they are alone; 2) women cannot stop the men from making such advances.
1) A man may not be alone with two women, but one woman may be alone with two men.
2) Rabbi Shimon says: even one man may be alone with two women, if his wife is with him, and he may sleep with them in an inn, because his wife watches him.
3) A man may be alone with his mother and his daughter, and he may sleep with them in immediate bodily contact; but when they grow up, she must sleep in her garment and he in his.
Section one: It is taken for granted that a man may not be alone with one woman. The mishnah adds that one man may not be alone even with two women. The fear is that the presence of two women will not deter the man from making advances on either or even on both of the women. However, one woman may be alone with two men, under the assumption that the presence of another man will deter each man from engaging in a prohibited and socially unacceptable act (sex with a woman not his wife).
Section two: Rabbi Shimon is more lenient and allows a man to be secluded with two women. According to the version of the mishnah which I translated above, such seclusion is only permitted if his wife is with him, for she will watch over him. However, other versions add the word and making this into a separate clause. They read that if a mans wife is with him he may be alone with one other woman, and may even sleep in the same room with both of them in an inn.
Section three: Seclusion is not prohibited with ones mother or daughter. While he is a minor he may sleep naked in bed with his mother, and while his daughter is a minor, she may sleep naked in bed with him. When they grow up they may continue to sleep in the same bed, but they must be clothed. As an aside, it seems that people normally slept without a garment. After all, the land of Israel is rather warm and a blanket often suffices.