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Hidden Actions
In the context of asymmetric information, hidden actions refer to actions taken by one party in a transaction that are not observable or verifiable by the other party after the contract is finalized. This type of information imbalance is the root cause of moral hazard. For example, an insured person's level of care in preventing a fire (a hidden action) cannot be monitored by the insurance company.
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Economics
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The Economy 2.0 Microeconomics @ CORE Econ
CORE Econ
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Empirical Science
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Introduction to Microeconomics Course
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Learn After
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