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> The biggest moral hazard is in colleges. The boards of colleges justified higher expense structures in the name of trying to win a zero sum rankings game. Th
by jdm2212 7y ago
> The biggest moral hazard is in colleges. The boards of colleges justified higher expense structures in the name of trying to win a zero sum rankings game.
That's not what "moral hazard" means.
- wtvanhest 7y agoFor clarity: “In economics, moral hazard occurs when an individual has an incentive to increase their exposure to risk because they do not bear the full costs of that risk” In this case, the risk is the increased cost structure in order to get the benefit of accolades from winning the zero sum rankings game. If it were their money instead of the universities’ money, they likely wouldn’t have increased the cost structure