Moral Hazard

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Wikipedia defines a moral hazard as:

Teenagers/adolescents and young people are exposed to moral hazard every day that they do not have the same rights and responsibilities as all other humans.

( eg: parents are like a car insurance company ).

I hold them responsible for falling for it, only when they have a responsibility *not* to fall for it.

I have personal experience with the principle-agent conflict from when I worked in pizza delivery. My incentives were usually aligned with those of my employer, more business meant more money for both of us due to my tips. The problem came when a chronic non-tipping customer was identified, aka a stiff. My boss made money on the stiffs but I actually lost money when I had to deliver to a known stiff wasting my gas and losing out on paying orders. Therefore, it was in my interest to discourage the stiffs from ordering again, by lowering my level of service, or by more nefarious means. If my boss hadn't been a total douchebag, I might have been more willing to go against my interests, but he treated his employees as beneath him, so we were more than willing to pursue our own aims at his expense.

Pizza delivery people have to pay for their own gas?! !

From now on, $5 is the minimum I tip, even if I have to borrow it from the neighbors!


(Sometimes, I just don't have cash on hand, and end up paying with a check.)

^

It depends on the store, usually drivers receive a per-delivery fee that is supposed to cover gas and maintenance, I've gotten anything from $.50 to $1.50 per order from different employers at different times. The nasty thing is that pizza places started adding in this "delivery charge" a few years ago, that goes directly to the store and not the driver. They figured out that instead of raising the menu price, they could tack on a surcharge and people would deduct it from the driver's tip instead of ordering from a competitor. The really ugly part is that many places already pay their drivers below minimum wage as "tipped employees", then essentially steal their tips with the misleading "delivery" charge. Aside from the pure greed reasons for doing this, jealousy played a big role since the drivers traditionally have been the best paid employees in the shop, often making more than the management. They're always looking for ways to siphon driver's tip money into their own pockets, hence why I don't work in that industry anymore.

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DiGiorno's frozen pizza isn't all that bad, either ... take that, Domino's!

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Yeah, it seems like people can only serve so many masters at once, usually it ends up being the one with the most immediate authority over their well-being. Other than that, if you really want to keep your ducks in a row, it means constantly staying in an environment that doesn't challenge you in such a way which can be very difficult and often times even impractical.

I suppose that this happens everywhere--from people who have proper jobs and who extend their lunch breaks, to Chief Executive Officers who arrange for themselves to be paid millions of dollars annually.