MS HS C

Jerry's car is broken and he takes it to a new mechanic. The new mechanic gives an estimate that Jerry believes is too high. George says, "Of course they're trying to screw you—that's what they do. It's because you don't know anything about what's going on under there!" George also says that Putty, Jerry's regular mechanic, wouldn't try to screw him. Reputation for honesty can overcome moral hazard problems.