This is called moral hazard. If the “suckers” who loaned you the money are “too big to fail” and in turn need bailing out, it is a form of negative externality.
Plenty of examples here in the recent financial crisis...
This is called moral hazard.
Indeed it is!
Compare strategic default.
This is called moral hazard. If the “suckers” who loaned you the money are “too big to fail” and in turn need bailing out, it is a form of negative externality.
Plenty of examples here in the recent financial crisis...
Indeed it is!
Compare strategic default.