Thursday, February 13, 2020

Adverse Selection, Moral Hazard, and Hidden Costs in the Self-Checking Line

Self-checking makes theft easier (WSJ, Feb. 2020).
  1. Who is more likely to self-check, an honest person or someone who is inclined to minor theft if the chance of detection is low?
  2. When is an honest person more likely to engage in minor theft: when a self-check machine goofs or when they are in front of a cashier?
  3. Do you think that stores accurately anticipated the additional shrinkage created by self-checking?


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