Moral Hazard
The term moral hazard arises out of a contractual agreement. When the terms of the contract serve as motivation for one of the parties to behave in a manner that is "contrary to the principles laid out in the agreement" (Investopedia, 2013). An example that is commonly used is when a salesperson is paid entirely on salary. The salesperson in that case has little direct incentive to perform according to the spirit of the contract, save for the threat of dismissal. The deal assumes that both parties will act according to the spirit of the contract, but the way the contract is structured this is not necessarily the case.
The concept of moral hazard is often applied to the financial industry. Most contracts are designed to prohibit moral hazard, but multiple hazards have been identified. For example, homeowners who found themselves in arrears or their homes under water might have received assistance. This creates a moral hazard. Normally, when a borrower fails to repay a mortgage, there are penalties that are incurred. These include foreclosure or credit problems that could prohibit future borrowing and could harm one's employment chances (Pritchard, 2013). If these consequences are not seen through, the borrower may realize that there is no longer disincentive to default. Thus, the homeowner will realize that it is better for him or her to default, perhaps receive assistance, and remain in his or her home. It has been argued that this particular form of moral hazard led to excessive borrowing during the run-up to the 2008 financial crisis.
There were other forms of moral hazard at work in that crisis as well. Normally, financial institutions maintain limits...
moral hazard in mergers, acquisitions and takeovers. The essay discusses the definition of moral hazard as well as related agency theory and the role of asymmetrical information in transactions. The essay also reviews insider trading from the perspective of insider trading. In the context of economic theory, moral hazard describes the tendency of a party to take excessive risks because the costs associated with the unreasonable risk are not incurred
What both these issues show is how advances technology / medicine are changing the overall scope of the ethical debate within the medical and legal communities. Together all of these events have helped to shape the way various ethical standards for medicine would evolve. This is important because they would clearly define the most appropriate conduct for medical research and how to interact with patients in the health care industry.
HSMS Gap Analysis and Hazard Identification Risk Assessments Description of APM Terminals Legal Environment Review of the Health and Safety Management System Description Gap Analysis Hazard Identification Physical Hazards Health and Welfare Hazards Risk Assessment Physical Hazard -- Working at Height - Scaffolding Health & Welfare Hazard -- Noise Action Plans Action Plan 1 - Management System Action Plan 2 -- Hazards and Risks Barbour Checklist: BS OHSAS 18001 Audit Checklist Occupational health and safety management has numerous benefits for business, not only an employer's duty
[09 September 2006]. http://www.bartleby.com/63/28/228.html. A www.questia.com/PM.qst?a=o&d=103972372 Shamoo, Adil E., and David B. Resnik. Responsible Conduct of Research. New York: Oxford University Press, 2003. Stanford Human Research Protection Program Wins Highest Rating from Accrediting Group.," Business Wire, March 23, 2006. UNIVERSITY POLICY." University of Medicine & Dentistry of New Jersey, 2006. http://www.umdnj.edu/oppmweb/Policies/HTML/AcademicAff/00-01-2085_00.html. Yoder, Linda H.. "The basics of human subjects protection.(Cancer: Caring and Conquering)," MedSurg Nursing, April 1, 2006. Wechsler, Jill. "FDA to modernize BIMO activities:
The Perils of Executive CompensationIntroductionExecutive compensation acts as an incentive for CEOs to enhance an organization�s performance and is common practice across industries. Michael Eisner was famously rewarded handsomely via executive compensation for his stewardship of Disney in the 1990s (Downes et al., 2007). Elon Musk has even more famously accrued substantial personal wealth via executive compensation for meeting targets related to Tesla�s share price (Jones, 2021). While executive compensation
All these charters that have clearly defined the boundaries of what both the positive i.e. natural rights and negative i.e. The unjust exploitative rights of the people are and how no institution or research domains have the right or power to violate them (Dierkes, Hoffmann and Marz, 1996). Based on the above fact, we have to consider all the concerns related towards security of an individual as well as his
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