Moral Hazard
From Open Risk Manual
Revision as of 17:40, 15 December 2020 by Wiki admin (talk | contribs)
Definition
Moral Hazard is a change of behaviour induced by the realization by an individual that they do not have to bear all the costs associated with his or her actions.
Examples
Examples of moral hazard can range from poor management or carelessness to fraud. People may also take excessive risks in order to obtain higher returns, in the confidence that they are assured government support.