Decision-makers who can take short-termed decisions without being affected by their long-term consequences take excessive risks. This condition is called moral hazard. Moral hazard happens when someone has incentives to increase an entity’s exposure to risk because he won’t bear the full cost of that risk. The condition of suffering the consequences of one’s actions, skin in the game, is the opposite of moral hazard. It incentivizes people to make decisions that are good for them and others. As such, it helps protecting populations. Risk Moral Hazard Skin in the Game Nassim Taleb