moral hazard


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Related to moral hazard: Adverse selection

moral hazard

n.
1. The risk to an insurance company that the holder of a policy will destroy the insured property in order to collect the monetary reimbursement available under the policy.
2. The risk that an individual or organization will behave recklessly or immorally when protected from the consequences.

moral hazard

n
(Insurance) insurance a risk incurred by an insurance company with respect to the possible lack of honesty or prudence among policyholders
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.moral hazard - (economics) the lack of any incentive to guard against a risk when you are protected against it (as by insurance); "insurance companies are exposed to a moral hazard if the insured party is not honest"
economic science, economics, political economy - the branch of social science that deals with the production and distribution and consumption of goods and services and their management
endangerment, hazard, jeopardy, peril, risk - a source of danger; a possibility of incurring loss or misfortune; "drinking alcohol is a health hazard"
References in periodicals archive ?
With the parliament's Thursday decision to pass a law that will allow the sale of loans to third parties, even with the amendment proposed by DIKO, which gives a borrower a last minute opportunity to negotiate its purchase from the bank, "the major moral hazard has been avoided," Bank of Cyprus' director of corporate affairs Michalis Persianis said.
Imagine that only 30 percent of the employees were covered, making the designation of who was covered a critical step, and introducing a far more severe moral hazard.
Finkelstein's insights on moral hazard, along with her discussion of the Oregon Medicaid experiment, are the highlights of her chapter.
Moral hazard has helped student debt balloon to $1.
com)-- Kirk Chisholm at Innovative Advisory Group has proposed a permanent solution to the excessive risk-taking and moral hazard problem at the “too big to fail” U.
Third-party payment, with its moral hazard, has increased demand and thereby driven up prices," they write, pointing out that prices have increased much less for items with low levels of third-party payment.
Ma Delun, former deputy governor of the People's Bank of China, the central bank, said at a forum on 21 June 2014, development of smaller banks including the privately owned banks will break the "too-big-to-fail" moral hazard ofdominant large state-owned banks.
The panopticon is simply a version of the conventional moral hazard problem in which agents alter their output when unobserved.
Time-inconsistency also plays a role: The rewards from letting banks fail--reduced moral hazard chief among them--lie in the future, whereas the costs--financial destabilization and voter outrage--are imminent.
Household debt relief schemes being discussed in some Gulf countries could increase moral hazard, Fitch Ratings has warned.
Household debt relief schemes being discussed in some Gulf Cooperation Council (GCC) member countries could increase moral hazard, Fitch Ratings says.
And letting them learn is precisely what the fight against moral hazard is about.