After trading in her Volkswagen Beetle for a much safer Mercedes sedan,Rene began driving less carefully.This is an example of:

Name: After trading in her Volkswagen Beetle for a much safer Mercedes sedan,Rene began driving less carefully.This is an example of:
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Question

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This scenario is an example of moral hazard problem. Rene feels less cautious because she is now driving a safer car, leading to a change in her behavior because she is insulated against the negative consequences of her actions.

After Trading in Her Volkswagen Beetle for a Much Safer