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 ?
Should we worry about moral hazard while the house is burning?
The Chinese contributors combine rough sets and ANN to analyze inventory early warning in supply chains, optimize the maintenance strategy for repair systems, develop a double-sided moral hazard model of contract choice, and evaluate rural electric network reformation.
In recent decades, as financial institutions moved from holding loans on their books to packaging and selling them to the investing public, a moral hazard was created.
Moral hazard arises when big institutions like Bear Stearns take unnecessary risks, knowing that the Fed will not let them fail.
This article summarizes recently published evidence for this dynamic, explores the feasibility of adapting insurance strategies that mitigate moral hazard, and then proposes a reform of humanitarian intervention based on the most feasible of these adapted strategies.
West Wales area point-topoint secretary Beverley Thomas, of Puntingbud Farm, Haverfordwest, who has saddled many winners in her time, has only one horse in training these days - Moral Hazard, which she owns in partnership with west Wales' Adrian Simpson.
However, while insurers are happy to sell policies of a higher premium, they're even more inclined to insure cars with lower values in order to avoid moral hazard.
Dogmatic ECB 'hawks' are more concerned about the moral hazard involved in purchases of government debt than about the moral hazard involved in negative rates.
In order to reduce the moral hazard implicit in the present system and to protect small depositors, it is proposed to introduce an explicit depositor insurance schemes through DPC which will compensate depositors up to prescribed limited amount in case of a bank's failure.
In Disentangling Moral Hazard and Adverse Selection in Private Health Insurance (NBER Working Paper No.
Moral hazard was being compounded by the market, most famously by the giant global insurer AIG.
In the literature on inter-organizational relationships, the phenomenon of moral hazard and opportunism has received a lot of interest (Heide & John, 1990; Rindfleisch & Heide, 1997; Lado et al.