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

Question

Quizplus · Accepted Answer

Moral hazard is the phenomenon where a party that is protected from risk behaves differently than if it were fully exposed to the risk. For example, if an individual knows that they are insured against car accidents, they may drive less carefully, leading to more accidents. This is because they do not bear the full cost of the risk.

________ Is the Phenomenon When One Party That Is Protected