Moral Hazard

Introduced in the field of insurance in the early 20th century, and has since been applied to a variety of fields, including economics, finance, and politics. The term has since been applied to other contexts, including government bailouts, where it is argued that the availability of government support can create a moral hazard by incentivizing companies or individuals to take risks that they might not otherwise take. The term "Moral Hazard" is believed to have originated from the insurance industry, where it was used to describe the risk that insured parties would behave in ways that increased the likelihood of a loss.