What Kind of Reaction Have You Gotten to This Idea?

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"It was an uncomfortable experience. It gave me an insight into my student even though it proceeded that event when I thought back on it," he says. "Just having such a big disparity in life situation and in particular if some of my life situation is contingent on the consummation of this contract ... That explains why all of these different transactions are illegal or all these different activities we feel bad about."

Mike Munger of Duke University talks with EconTalk host Russ Roberts about the psychology, sociology, and economics of buying and selling. Why are different transactions that seemingly make both parties better off frowned on and often made illegal? In theory, all voluntary transactions should make both parties better off. But Munger argues that some transactions are more voluntary than others. Munger lists the attributes of a truly voluntary transaction, what he calls a euvoluntary transaction and argues that when transactions are not euvoluntary, they may be outlawed or seen as immoral. Related issues that are discussed include price gouging after a natural disaster, blackmail, sales of human organs, and the employment of low-wage workers.