Is economics a game with no rules?
In college I was introduced to a game called “Jungleball.” The first rule of Jungleball is that there are no rules. The second rule is to disregard the first rule. Sometimes it would take the form of a volleyball game, where some players got onto their teammates’ shoulders to spike the ball, or where the server’s team would try to tackle their opponents from below the net. Other times it would be a soccer/football game that involved passing, throwing, kicking, tripping, and wrestling.
But economics isn’t Jungleball. When I go to an airport, I need my flights to arrive and leave on schedule. If I buy a coconut, I don’t expect it to be rotten inside. There are two forces that work to keep vendors on the straight-and-narrow. One is the threat of prosecution. Clearly, if you sell defective goods or make false claims for your services you can be charged with fraud. Even the most ardent libertarian will admit that enforcing contracts is a key function of the State.
But the other is even more powerful: reputation. In an era of Twitter feeds and Yelp reviews, no good or bad deed will go unrecognized. While the negative power a mob must be recognized, in general the increased information and transparency that come from Amazon reviews and other social media provide more accountability than a fleet of FDA inspectors. Let the seller beware!