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...
View Full Document
- Spring '07
- Economics, mutually beneficial transactions, Value Judgments Predictive