MoralHazard is a risk of party(ies) in an agreement taking on behavior that is not on moral high grounds, because the agreement has provisions to compensate undesirable behavior.

Some would argue that a good Social Welfare system is an example of MoralHazard. And that lazy people take unfair advantage of the system (agreement).

See more at http://en.wikipedia.org/wiki/Moral_hazard

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CategoryEconomics CategoryPsychology