moral hazard


Definition of moral hazard 

: the possibility of loss to an insurance company arising from the character or circumstances of the insured

Examples of moral hazard in a Sentence

Recent Examples on the Web

This sort of arbitrary custom breeds serious moral hazard in Chinese markets. Jacky Wong, WSJ, "What Xiaomi’s Dropped Listing Says About Chinese Markets," 20 June 2018 Science squabbles notwithstanding, both sides of the moral hazard argument agree that negative emissions technologies like those in development at Carbon Engineering should be pursued with vigor. Robbie Gonzalez, WIRED, "The Potential Pitfalls of Sucking Carbon From the Atmosphere," 13 June 2018 Stephen Lynch, also a Democrat, from Massachusetts, said that by failing to provide public accountability and thus lumping the good with the bad, the review created moral hazard. The Economist, "Other American banks may have misbehaved as Wells Fargo did. Which ones?," 14 June 2018 European powers were not totally ignorant of the moral hazards involved. Longreads, "Kara Walker’s Subtlety," 28 Feb. 2018 The prospect of a massive American intervention almost certainly extended and exacerbated the Syrian war and also created a moral hazard by allowing rebels to overestimate their chance of success. Michael Brendan Dougherty, National Review, "What Are We Still Doing in Syria?," 25 Jan. 2018 This moral hazard is aggravated by the market’s unhealthy concentration. The Economist, "Carillion’s collapse raises awkward questions about contracting out," 18 Jan. 2018 When the bottom line is the stockholder and not the patient, there is a moral hazard that cannot be resolved, even with the best of intentions. Anchorage Daily News, "Readers write: Letters to the editor, December 8, 2017," 8 Dec. 2017 Even apart from the moral hazard, keeping research plans secret—as the current scientific enterprise incentivizes us to do—is appallingly inefficient and outright dangerous. Kevin M. Esvelt, Slate Magazine, "What Victor Frankenstein Got Wrong," 25 Jan. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'moral hazard.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of moral hazard

1881, in the meaning defined above

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The first known use of moral hazard was in 1881

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More Definitions for moral hazard

moral hazard


Legal Definition of moral hazard 

1 : the possibility of loss to an insurance company (as by arson) arising from the character or circumstances of the insured deductibles decrease moral hazard

2 : the likelihood of investors to take greater risks because of the knowledge that losses incurred as a result of those risks will be covered by another (as a government)

More from Merriam-Webster on moral hazard

Rhyming Dictionary: Words that rhyme with moral hazard Encyclopedia article about moral hazard

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