The existence of moral hazard in a strategic alliance proves that at least one of the parties is either malicious or dishonest.

Question

Quizplus · Accepted Answer

The existence of moral hazard in a strategic alliance does not necessarily indicate that one of the parties is malicious or dishonest. It could occur due to asymmetric information, lack of trust, or other factors. More commonly, it stems from the fact that each party has a different set of incentives and goals, and they may not align perfectly with each other. Therefore, it is important to design the alliance structure, contracts, and monitoring mechanisms that can mitigate the moral hazard problem and align the interests of the parties.

The Existence of Moral Hazard in a Strategic Alliance Proves