Difference between revisions of "Moral hazard"
(Created page with "Moral hazard is when people have insurance against a certain event, they are less likely to guard against that event occurring. ==Definition== According to Principles o...") |
|||
| Line 4: | Line 4: | ||
According to [[Principles of Economics by Timothy Taylor (3rd edition)]], | According to [[Principles of Economics by Timothy Taylor (3rd edition)]], | ||
:[[Moral hazard]]. When people have insurance against a certain event, they are less likely to guard against that event occurring. | :[[Moral hazard]]. When people have insurance against a certain event, they are less likely to guard against that event occurring. | ||
| − | + | According to [[Macroeconomics by Mankiw (7th edition)]], | |
| + | :[[Moral hazard]]. The possibility of dishonest behavior in situations in which behavior is imperfectly monitored; for example, in efficiency-wage theory, the possibility that low-wage workers may shirk their responsibilities and risk getting caught and fired. | ||
[[Category: Economics]][[Category: Articles]] | [[Category: Economics]][[Category: Articles]] | ||
Revision as of 17:50, 2 July 2020
Moral hazard is when people have insurance against a certain event, they are less likely to guard against that event occurring.
Definition
According to Principles of Economics by Timothy Taylor (3rd edition),
- Moral hazard. When people have insurance against a certain event, they are less likely to guard against that event occurring.
According to Macroeconomics by Mankiw (7th edition),
- Moral hazard. The possibility of dishonest behavior in situations in which behavior is imperfectly monitored; for example, in efficiency-wage theory, the possibility that low-wage workers may shirk their responsibilities and risk getting caught and fired.
