Moral hazard results from ________ information and adverse selection results from ________ information.
A) private; private
B) private; public
C) public; private
D) public; public

Question

Quizplus · Accepted Answer

Moral hazard arises when one party has private information about their actions post-contract, while adverse selection occurs when one party has private information about their characteristics pre-contract.

Moral Hazard Results from ________ Information and Adverse Selection Results