Do Social Networks Prevent Bank Runs?

Garcia Rosa, Alfonso; Kiss, Hubert Janos; Rodríguez Lara, Ismael

Publication:
Do Social Networks Prevent Bank Runs?

dc.contributor.author	Garcia Rosa, Alfonso
dc.contributor.author	Kiss, Hubert Janos
dc.contributor.author	Rodríguez Lara, Ismael
dc.contributor.department	Fundamentos del Análisis Económico
dc.date.accessioned	2010-01-18T14:58:19Z
dc.date.available	2010-01-18T14:58:19Z
dc.date.created	2010-01
dc.date.issued	2010-01-18T14:58:19Z
dc.description.abstract	We develop, both theoretically and experimentally, a stereotypical environment that allows for co-ordination breakdown, leading to a bank run. Three depositors are located at the nodes of a network and have to decide whether to keep their funds deposited or to withdraw. One of the depositors has immediate liquidity needs, whereas the other two depositors do not. Depositors act sequentially and observe others’ actions only if connected by the network. Theoretically, a link connecting the first two depositors to decide is sufficient to avoid a bank run. However, our experimental evidence shows that subjects’choice is not a¤ected by the existence of the link per se. Instead, being observed and the particular action that is observed determine subjects’choice. Our results highlight the importance of initial decisions in the emergence of a bank run. In particular, Bayesian analysis reveals that subjects clearly depart from predicted behavior when observing a withdrawal.	en_EN
dc.format	application/pdf	es
dc.format.extent	20	en_EN
dc.identifier.uri	http://hdl.handle.net/10201/9723
dc.language	eng	en_EN
dc.relation.ispartof	Proyecto de investigación:	en_EN
dc.relation.ispartofseries	WP-UMUFAE	en_EN
dc.relation.ispartofseries	2010.01	en_EN
dc.rights	info:eu-repo/semantics/openAccess	es
dc.subject	Bank runs	en_EN
dc.subject	Coordination failure	en_EN
dc.subject	Experimental evidence	en_EN
dc.subject	Networks	en_EN
dc.subject.other	CDU::3 - Ciencias sociales::33 - Economía	en_EN
dc.title	Do Social Networks Prevent Bank Runs?	en_EN
dc.type	info:eu-repo/semantics/article	en_EN
dspace.entity.type	Publication	es