# Moral Hazard
A situation in [market](market.md) behaviour in which participants are encouraged to take overly risky positions because their exposure is based purely on upside and are isolated from downside of the positions failing. 

Often cited as a factor leading to the 2008 subprime mortgage crisis.

See [credit default swaps](cds.md).

## References
* Momtaz, Paul P. 2020. ‘Entrepreneurial Finance and Moral Hazard: Evidence from Token Offerings’. Journal of Business Venturing, 106001.