4 ms·
Sure, though, to be pedantic, a common example of moral hazard is the increased likelihood of driving recklessly in the presence of mandatory seat belts. See ht
by mspecter 7y ago
Sure, though, to be pedantic, a common example of moral hazard is the increased likelihood of driving recklessly in the presence of mandatory seat belts. See https://web.stanford.edu/~leinav/pubs/RESTAT2003.pdf https://web.stanford.edu/~leinav/pubs/RESTAT2003.pdf
- matt4077 7y agoThat’s not a moral hazard. The word doesn’t even appear in the paper. It’s just an example of somewhat efficiently choosing a different point on the risk/reward continuum when the payoffs change. A moral hazard is choosing a selfish course of action with negative external effects.