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Finance - Moral hazard

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What are the issues that are involved with the idea of moral hazard?

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Solution Summary

A discussion on what moral hazard is and what issues are involved.

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Issues of moral hazard

Moral hazard has issues that arise because one party might feel that the risks involved are more likely to be negative for others, rather than themselves. If others will have to bear a larger brunt of the problems than the risk taker, then the value of the risk is okay for the risk taker.

Another issue is in the flow of information involved. One person involved, the risk ...

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