Due to moral hazard,the goal of providing security is likely to conflict with the goal of efficiency.

Question

Quizplus · Accepted Answer

Moral hazard refers to the tendency of individuals or organizations to take on more risk because they believe they are protected or insured against potential losses. This can lead to inefficient and even reckless behavior because the costs and consequences of negative outcomes are borne by someone else (such as an insurer or the government). In the context of providing security, this means that if people believe they are fully protected from harm, they may not take appropriate precautions or invest in their own safety, which could lead to higher costs in the long run. Therefore, achieving both security and efficiency goals is likely to be difficult or even impossible, and there may be trade-offs between them.

Due to Moral Hazard,the Goal of Providing Security Is Likely