Apart from a few ideologues – and they do exist – most economists today understand that the so-called "Free Market" cannot be left entirely to its own devices. (Actually there is no such thing as a "Free Market," but we'll get to that. ) The textbook will acknowledge that in certain special situations, there can be “market failures” that require some patching up. But these are usually presented as exceptions. Because Economics 101 gets around to reality as an afterthought, the fantasyland has gotten stuck in the minds of many people, including politicians, the journalists who write down what politicians say and repeat it back to us as conventional wisdom, rich people who really like to hear it, and a large segment of the public who are exposed to the idea, as at least a good approximation of reality. Politicians are fond of saying “It’s economics 101!” It might be, but that doesn’t mean it’s true.
Let us return briefly to the lonesome world of Alice and Bob. For the transaction to truly benefit both of them, it should be obvious that they both have to know exactly what they are getting – that’s called the assumption of perfect information. If Alice’s chickens turn out to be diseased and inedible, Bob is not happier after all. Asymmetric information is common throughout the economy– generally, sellers know more about the product than buyers – but it’s obviously an inherent feature of Medicine, which is my specialty as a social scientist. After all, the product for sale is expertise. But it pertains to at least some degree in most situations.
Next bogus assumption: Willing sellers, willing buyers.