Final answer:
Signing a 5-year contract with a college basketball coach rather than a sequence of 5 one-year contracts gives rise to the problem of moral hazard, which may lead to a losing season.
Step-by-step explanation:
Signing a 5-year contract with a college basketball coach rather than a sequence of 5 one-year contracts gives rise to the problem of moral hazard. Moral hazard refers to the possibility that one party, in this case, the coach, may act differently or take more risks once they have a long-term contract, knowing that they are protected and might not face immediate consequences. In this situation, the coach may not perform as well as they would under the pressure of individual one-year contracts, potentially resulting in a losing season.