moral hazard

(noun)

The prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.

Related Terms

Examples of moral hazard in the following topics:

  • The International Monetary Fund (IMF)

    • The incentive problem of moral hazard, which is the actions of economic agents maximizing their own utility to the detriment of others when they do not bear the full consequences of their actions, is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway.

  • Hidden poisons

    • The average television, for example, contains 4,000 toxic chemicals (200 of which emit hazardous fumes when the TV is turned on) and many buildings are insulated with formaldehyde-laden particleboard that heavily pollutes indoor air.
    • Moreover, the average PC consumes ten times its weight in hazardous chemicals and fossil fuelsto complete its production (in India and China alone, about 70% of arsenic, lead, cadmium, chromium, cobalt, mercury and other heavy-metal pollutants come from electronic waste created just by computer manufacturers).

  • It doesn't add up, it multiples

    • On the contrary, sustainable, closed-loop production practices reduce costs, conserve raw materials, help eliminate toxins and hazardous materials (and their expense), and reduce negative impacts on the environment.

  • Occupational Safety and Health Act

    • The goal of the OSHA Act is to make sure employers provide employees a place to work that is free from recognized hazards.
    • In addition to the noise they make, both machines emit Volatile Organic Compounds and other hazardous particles.
    • Its main goal is to ensure that employers provide employees with an environment free from recognized hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.
    • Employers must also communicate with employees about hazards in the workplace.

  • It's not just big business

    • The idea behind AB 32 is simple: to balance the reduction of hazardous emissions with incentives for improvement.

  • Recycling and industrial waste

    • This is particularly true with hazardous, concentrated substances found in industrial waste (many of which require expensive, specialized disposal methods).

  • Ten ways to minimize product waste

    • Reduce the hazardous makeup of the product.
    • Reducing toxin use helps eliminate the often unconsidered expenses induced by hazardous materials.
    • Elsewhere, the Hollywood Memorial Hospital in Hollywood, Florida, replaced the hazardous mercury-based batteries in its portable cardiac monitoring equipment with environmentally friendly zinc-air batteries.
    • Switch to non-hazardous manufacturing methods.
    • Manufacturing processes that rely on hazardous chemicals, heavy metals, refrigeration or combustion are usually more expensive than they appear.

  • Introduction to Ongoing Measurement and Record-Keeping

    • For many companies, this involves scrutinizing toxic or hazardous material purchases (as well as usage costs), examining the amount (and types) of waste different departments or processes produce (usually by recording what each one throws away), and investigating the fees, extraneous charges and taxes associated with current waste-handling practices.

  • How businesses waste water

    • Less than half of one per cent can be used by humans, but this amount increasingly poses a potential hazard because it's rapidly becoming more polluted.

  • Market Share

    • However, increasing market share may be dangerous for makers of fungible hazardous products, particularly products sold into the United States market, where they may be subject to market share liability.