Moral hazard occurs when the parties on once side of the market,who have information not known to others,self select in a way that adversely affects the parties on the other side of the market.

Question

Quizplus · Accepted Answer

Moral hazard occurs when one party to a transaction takes on more risk because they know that someone else (typically the other party in the transaction) will bear the cost of those risks. The definition provided describes adverse selection, not moral hazard.

Moral Hazard Occurs When the Parties on Once Side of the Market,who