Information asymmetry problem related to hidden action is referred to as:
A)prisoner's dilemma.
B)principle-agent problem.
C)moral hazard.
D)adverse selection.
E)fundamental attribution error.

Question

Quizplus · Accepted Answer

Moral hazard refers to the situation where one party in a transaction takes on more risk because they know that the other party bears the consequences of their actions, which is a classic example of information asymmetry related to hidden actions.

Information Asymmetry Problem Related to Hidden Action Is Referred to As