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In an article about car owners defrauding
insurers, the Wall Street Journal wrote "In the
New York City area, the favored technique is simply to
abandon vehicles in rough neighborhoods, especially
certain areas lining the Bronx Expressway. Owners can
then hop a subway and report cars stolen. 'You just have
to leave a car overnight on these streets and its gone,'
says Thomas J Cleary…." (10/9/90) The behavior
discussed here is an example of:
hedging.
signaling.
moral hazard.
free riding.
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