Moral hazard refers to the tendency of individuals or entities to take on greater risks or engage in reckless behavior when they are insulated from the consequences of their actions, typically because they are protected by insurance, bailouts, guarantees, or other forms of risk mitigation. Moral hazard arises when the costs or negative impacts of risky behavior are borne by others, leading to distorted incentives and adverse outcomes.
Risk? Not my problem! 🎲💸 When people take bigger risks because they won’t bear the cost.
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