Concept
Version 7
Created by Boundless
Asymmetric Information: Adverse Selection and Moral Hazard
Moral Hazard
An insured driver getting into a car accident is an example of a moral hazard. The driver will take risks because the cost is not directly felt due to a transaction. The insurance company pays for the accident and not the driver.
Source
Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:
"Japanese car accident blur."
http://en.wikipedia.org/wiki/File:Japanese_car_accident_blur.jpg
Wikipedia
CC BY-SA.