What Is the Difference Between Adverse Selection and Moral Hazard

question 62

Essay

What is the difference between adverse selection and moral hazard?

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Definitions:

Employee Attitudes

The beliefs and feelings employees have about their job, role, and organization, which can significantly affect their job performance and satisfaction.

Human Capital Component

Refers to the economic value of an employee's skill set, including education, training, and experience.

Employees' Skills

The abilities and competencies that employees possess, which contribute to the performance of their job duties.