Monday, April 07, 2008

There is a G-d?

by Ken Houghton

And maybe Alanis Morissette portrayed her accurately, judging by the current contretemps at the Mortgage Bankers Association (h/t Dealbreaker).

Economists Question: Identify the "moral hazard," if any, in the linked story. Explain how it could have been quantified, mitigated, or defined by one or both of the parties.

If you do not believe there is "moral hazard" in the above case, but still believe in "moral hazard" for residential transactions, please define the differences so as to explain the differences between the two scenarios.

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