Why might the effects of moral hazard be smaller than expected?

The term "moral hazard" was first used in the 17th century.

To many Americans, moral hazard is something that only happens elsewhere.

In other circumstances, though, moral hazard seems to have a much smaller impact.

And there certainly are situations where moral hazard does seem to have an effect on people's choices.

It will dole out some moral hazard to the banks.

Insurance companies have long been familiar with the phenomenon, which they call moral hazard.

So in that sense moral hazard did affect investors' decisions.

That flaw is known in the insurance business as "moral hazard."

There is, finally, at least one good reason to worry about budget deficits: they are a form of moral hazard.