________ is the phenomenon when one party that is protected from risk behaves differently than if it were fully exposed to the risk.

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16-06-2018
Social Studies

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________ is the phenomenon when one party that is protected from risk behaves differently than if it were fully exposed to the risk.

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LearnGrow LearnGrow · Answer 1 · 2018-06-25T13:55:05+02:00

LearnGrow LearnGrow

25-06-2018

Moral hazard is the phenomenon when one party that is protected from risk behaves differently than if it were fully exposed to the risk.
It is a situation in which one party has an incentive to take risks that others will pay for.Moral hazard is usually applied to the insurance industry.
However, the term is used also in business denoting the idea of a corporation being too big to fail.

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