The political economy of moral hazard

Jörg Guido Hülsmann

Politická ekonomie, 2006, vol. 2006, issue 1, 35-47

Abstract: Conventional theory explains moral hazard as a consequence of information asymmetries. The present paper proposes an alternative approach. We argue that information asymmetries are just one among several causes of moral hazard and that they entail negative consequences for third parties only accidentally. By contrast, moral hazard also results from government interventionism. And in this case negative consequences are systematic and do result even in the absence of information asymmetries.

Keywords: Moral hazard; political economy; information asymmetries; economic systems; Austrian economics (search for similar items in EconPapers)
JEL-codes: D00 D80 K00 P00 (search for similar items in EconPapers)
Date: 2006
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DOI: 10.18267/j.polek.544

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