Reactive Risk and Rational Action: Managing Moral Hazard in Insurance Contracts

Reactive Risk and Rational Action: Managing Moral Hazard in Insurance Contracts offers a sophisticated anatomy of how insurers confront losses that change precisely because insurance exists. Rather than treating pricing as a purely actuarial exercise, the book shows why markets “thin” when incentives shift and why insurers embed hierarchy inside contracts to steady calculation. Beginning with a clear definition of reactive risk—loss probabilities that move in response to policyholder behavi...