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Unformatted text preview: mutual benefits transactions: making someone better off without making someone else worse off Examples of policies that lead to mutually beneficial transactions: Imperfect information (Ignorance) Capital constraints Pareto Improving Transaction (e.g. government provides loan guarantees to banks that lend to students for education loans) Value judgments: 1. Society should always encourage mutually beneficial transactions 2. All market transactions are mutually beneficial 3. Therefore, society should always encourage markets-ignoring third parties-potential for exploitation...
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This note was uploaded on 09/28/2008 for the course ILRLE 2400 taught by Professor Smithr during the Spring '07 term at Cornell University (Engineering School).
- Spring '07