A moral hazard is when the consequences are no longer tied to a decision. The classic example is when someone buys insurance. Because the negative consequences are covered, you will be more likely to take a risky action. For example, if you have health insurance, you're more likely to go horseback riding.
Moral Hazard
Moral Hazard
Moral Hazard
A moral hazard is when the consequences are no longer tied to a decision. The classic example is when someone buys insurance. Because the negative consequences are covered, you will be more likely to take a risky action. For example, if you have health insurance, you're more likely to go horseback riding.