Lecture 12 Flashcards
1
Q
Michael Sandel’s arguments for ‘free markets’:
A
- Libertarian –> people are free to buy and sell, as long as they don’t violate anyone’s rights
- Utilitarian –> market exchange benefits buyers and sellers, thereby improving our collective well-being or social utility
2
Q
Arguments against ‘free markets’:
A
- Inequality –> the more things money can buy, the higher the inequality
- Value corrupton –> in some cases, free markets change the character and meaning of the good itself
3
Q
Diffusion of responsibility
A
In a market, two are responsible
4
Q
Social norms formation
A
In a market, norms form (if my partner is willing to buy, i should be willing to sell)
5
Q
Materialistic framing
A
In a market, a good deal is desired
6
Q
Information asymmetry
A
When one party has more information than the other party (Higher taxi price with foreigners)
7
Q
Moral hazards
A
When one party tries to exploit an information advantage in a dishonest or undesirable way
- Like a mechanic selling you more than you need
