Studies show that during the March Madness college basketball tournament, the productivity of the average company in the US falls considerably. This is an example of
A)the Condorcet Paradox.
B)signaling.
C)moral hazard.
D)screening.

Question

Quizplus · Accepted Answer

This is an example of moral hazard, where employees may engage in less productive behavior (watching basketball games) because they do not bear the full consequences of their reduced productivity.

Studies Show That During the March Madness College Basketball Tournament