Economic Theory Explained by Football – 16. The Moral Hazard

The Moral Hazard Theory related to a situation where the behaviour of one person or party may change to the detriment of another after a transaction or contract has been completed. Insurance policies are a more conventional example where the insured party may take more risks knowing that there's a financial safety net should things go wrong.

from The Ball is Round http://ift.tt/2b80Og4