The Effect of Moral Hazard on Transaction Cost in Society

This paper is devoted to the research on human behavior based on the common theory of economics and morality. When economic agents behave in a moral sense, some cost and price must be paid and cost-benefit be analyzed as well. In a society, moral agents pay for their behavior and bring benefits to society. Through institutional construction and arrangement, moral hazard behaviors should invite physical and spiritual retribution with the purpose of promoting healthy trend.