A service like CARFAX, which provides a used car buyer with the complete history of a used car, is profitable because of the problem of moral hazard.

Name: A service like CARFAX, which provides a used car buyer with the complete history of a used car, is profitable because of the problem of moral hazard.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

CARFAX is profitable due to the problem of asymmetric information, not moral hazard. It helps buyers access information that sellers might not disclose, reducing information asymmetry.

A Service Like CARFAX, Which Provides a Used Car Buyer