To the despair of almost every informed economist, by New Year’s Day, Medicare recipients who want coverage for 2006 will have chosen a prescription drug plan. Even the former chairman of the ...

Desperate times call for desperate measures. In recent years and in the face of unprecedented changes in the climate system, some previously unknown and risky solutions have been proposed to put a ...

I want to revisit the subject of moral hazard and the financial crisis, which I posted about yesterday, because I think the argument I made has been misunderstood in an important way, and because I ...

Florida’s home insurance market has long been a mess. With private property insurance getting scarcer and more expensive, some members of the legislature are pushing for an even greater role for the ...

“Moral hazard” refers to the risks that someone or something becomes more inclined to take because they have reason to believe that an insurer will cover the costs of any damages. The concept ...

Why would a big bank with so much at stake not care about the risks that they were taking? Well, at that point, they'd all been bailed out. I mean, my feeling at that point was, well, of course they ...

We study a two-period moral hazard problem with risk-neutral and wealthconstrained agents and three identical tasks. We show that the allocation of tasks over time is important if there is a capacity ...

At a time when the American Left wants to introduce Swedish-style socialism into the U.S., we should remember that generous welfare states pose a moral hazard. Their well-intentioned policies ...

I’ve been making the argument that while moral hazard, in the wake of the financial crisis, is now a serious problem (because of the implicit guarantee that big banks will not be allowed to fail), it ...