Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282206 
Year of Publication: 
2022
Series/Report no.: 
KRTK-KTI Working Papers No. KRTK-KTI WP - 2022/13
Publisher: 
Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies, Budapest
Abstract: 
Andolfatto et al. (2017) proposes a mechanism to eliminate bank runs that occur as a coordination problem among depositors (Diamond and Dybvig, 1983). Building on their work, we conduct a laboratory experiment where we offer depositors the possibility to relocate their funds to a priority account. We find evidence that the mechanism reduces not only bank runs that occur because of a coordination problem among depositors but also panic bank runs (Kiss et al., 2018) that occur when depositors can observe the action of others.
Subjects: 
bank run
coordination problem
panic behavior
experimental economics
policy tools
financial stability
JEL: 
C91
D90
G21
G40
Document Type: 
Working Paper

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