“Moral hazard” is the risk that insulation from the consequences of bad decisions can encourage greater risk-taking. This guide stays with the current documented meaning and does not assert unsupported origin chronology.
ReviewedEvidence1 sourceSectionPhrases & Idioms
Quick answer
“Moral hazard” is the risk that insulation from the consequences of bad decisions can encourage greater risk-taking.
Key details
Canonical Formmoral hazard
Core Meaninga situation where protection from the consequences of bad decisions can encourage a person or organization to take greater risks
Further guidance
History Boundary
Current dictionary-supported meaning is published without claiming an exact inventor, coinage date, or absolute first use.
Meaning
a situation where protection from the consequences of bad decisions can encourage a person or organization to take greater risks
Usage Boundary
Use the term for changed incentives created by protection from consequences, not merely as a moral judgment that someone behaved badly.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
“At stake” means that something valuable is in danger of being lost. The guide stays with current documented meaning and does not add unsupported origin chronology.
A “black swan” is an event that happens despite people having thought it could not happen. Use the figurative sense for a supposedly impossible or profoundly unexpected event; keep it distinct from the literal black swan bird, and do not treat every ordinary surprise as a black swan.
The butterfly effect describes disproportionate downstream consequences from a small change. Cambridge connects the phrase with chaos theory; in general use, keep the emphasis on a small initial change producing a much larger outcome rather than on ordinary direct causation.
Oxford defines “a canary in a/the coal mine” as something that gives an early warning of danger. This guide uses that current figurative meaning without claiming an unsupported exact first use.
A “chain reaction” describes a series of events in which each event causes the next one. In figurative use, focus on the causal sequence; the expression also has a literal scientific sense, so context determines which reading applies.
In figurative and business use, critical mass is a threshold: enough people, customers, resources or scale for a development to become possible or self-sustaining. Context separates that use from the literal physics meaning.
A “domino effect” describes a situation in which one event causes a series of related events to happen one after another. Use it when the emphasis is on sequential consequences spreading from an initial event, not simply on two events happening at the same time.
