Moral hazard describes contexts in which, once risk is shared, the individual fails to make as much effort to avoid harm as when risk was not shared.

Name: Moral hazard describes contexts in which, once risk is shared, the individual fails to make as much effort to avoid harm as when risk was not shared.
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Question

Quizplus · Accepted Answer

This is the definition of moral hazard. Shared risk can lead to decreased effort to avoid harm because the consequences of that harm are now shared.

Moral Hazard Describes Contexts in Which, Once Risk Is Shared