(Solved):How should we deal with moral hazards? View Answer…

 

Question

How should we deal with moral hazards?

 

EXPERT ANSWER

Answer: Greater Risk Sharing and Incentive Alignment

The only real solution to moral hazard is to reduce the proportion of risk being offloaded by the main party and make sure incentives align. An example would be to have an insured pay a set % of a claim with the insurer so that the insured at least has some incentive not to take risk. The

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