Because geoengineering is a form of controlling the risks associated with global warming, it leads to a moral hazard problem.
The moral hazard problem occurs in both the individual level and in a collective fashion, which justifies the prudential regulations.
If employers agree to all kinds of wage agreements that they cannot afford, you have huge moral hazard problems.
For example, lenders may incur costs, also known as agency costs, to overcome the moral hazard problem that arises when evaluating the credit worthiness of borrowers.
The draft of the report that came into my hands declares that "The importance of the moral hazard problem cannot be overstated."
This is the "moral hazard" problem that the economist Kenneth Arrow identified as long ago as 1963.
This mitigates the unemployment problem but also poses moral hazard problems, reducing labor force participation in the family.
"They want to avoid the moral hazard problem."
In general there are two moral hazard problems related to the capital market.
Moral hazard problems also occur in employment relationships.