Linda noticed that ever since her brother bought theft insurance for his car,he has been forgetting to lock his car.Her brother's behavior is an example of ________.

Question

Quizplus · Accepted Answer

Linda's brother's behavior is an example of moral hazard, which refers to the idea that people may engage in riskier behavior once they are protected against loss. With theft insurance, Linda's brother may feel less vulnerable to the risk of car theft and may therefore be less careful about locking his car. This is a typical example of moral hazard.

Linda Noticed That Ever Since Her Brother Bought Theft Insurance