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→Example: Insurances: clean up & uniformity
The second case happens after the person got the insurance. The insurance company can't monitor the insured individual, so it won't know if the accident it has to pay for was a genuine accident or the result of sloppiness (caused by the "Who cares? I'm insured, anyway!" mindset). This behavior is called [[moral hazard]].
The second case happens after the person got the insurance. The insurance company can't monitor the insured individual, so it won't know if the accident it has to pay for was a genuine accident or the result of sloppiness (caused by the "Who cares? I'm insured, anyway!" mindset). This behavior is called [[moral hazard]].
[[category:economics]]
[[Category:Economics]]