Before revision: Standard economic theory makes an allowance for the agency problem, but not the compounding of moral hazard in the presence of informational opacity, particularly in what concerns high-impact events in fat tailed domains  . Nor did it look at exposure as a filter that removes bad risk takers from the system so they stop harming others.
After revision: Standard economic theory makes an allowance for the agency problem, but not the compounding of moral hazard in the presence of informational opacity, particularly in what concerns high-impact events in fat tailed domains (under slow convergence for the law of large numbers) . Nor did it look at exposure as a filter that removes bad risk takers from the system so they stop harming others.