Economics of Seinfeld – Moral Hazard and Imperfect Information

Here is another clip from Seinfeld which is an example of moral hazard and imperfect information.

Jerry’s car is stolen, so he rents a car. The rental company doesn’t give him the car he reserved; he gets a small economy car. They ask if he wants insurance, and he replies, “Yes, because I’m going to beat the hell out of this car.” Source: Seinfeld Economics

Leave a Reply

Your email address will not be published. Required fields are marked *