Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154144
Authors: 
Brown, Martin
Trautmann, Stefan T.
Vlahu, Razvan
Year of Publication: 
2014
Series/Report no.: 
ECB Working Paper 1711
Abstract: 
We study experimental coordination games to examine through which transmission channels, and under which information conditions, a panic-based depositor-run at one bank may trigger a panic-based depositor-run at another bank. We find that withdrawals at one bank trigger withdrawals at another bank by increasing players’ beliefs that other depositors in their own bank will withdraw, making them more likely to withdraw as well. Importantly though, observed withdrawals affect depositors’ beliefs, and are thus contagious, only when depositors know that there are economic linkages between their bank and the observed bank.
Subjects: 
bank runs
Contagion
systemic risk
JEL: 
D81
G21
G28
ISBN: 
978-92-899-1119-1
Document Type: 
Working Paper

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