Saturday, November 3, 2007

Moral Hazard and the NHL

For those of you who don't reside in this frozen land, the NHL refers to the 'National Hockey League'. That is ice hockey, not field hockey.

Anyway, a regular concern of mine is whether the powers that be have economists on staff. In any situation where one needs to set rules to prevent injury - financial or otherwise - we have a role for economics.

A friend of mine suggested today that a fund be created to support players who are severely injured while playing hockey. I felt compelled to point out that this might relieve some of the guilt (i.e. lower the cost) of causing an injury in the first place. Of course, I have no idea on whether the net benefits here are positive. They may well be.

In fact, this logic applies to any initiative that reduces injuries without increasing the punishment levied to the offender, including safety improvements to the arena. Beware of unintended consequences in all things.

NOTE: Obviously this post was motivated in part by the hit on Patrice Bergeron. As much as I enjoy a good hockey game, I have real troubles watching it at times.

No comments: