@article{a3cdaeef652042b29c3a633099497bad,
title = "On the dynamics and severity of bank runs: An experimental study",
abstract = "This paper presents an experimental investigation of the factors that affect the dynamics and severity of bank runs. Our experiments demonstrate that the more information laboratory economic agents can expect to learn about the crisis as it develops, the more willing they are to restrain themselves from withdrawing their funds once a crisis occurs. Furthermore, our results indicate that the presence of insiders, who know the quality of the bank, significantly affects the dynamics of bank runs and helps mitigate their severity. We also show that deposit insurance, even of a limited type, can help diminish the severity of bank runs.",
keywords = "Bank runs, Banking crises, Deposit insurance, Experiments, Informed depositors",
author = "Andrew Schotter and Tanju Yorulmazer",
note = "Funding Information: This paper is a revised version of a chapter of Tanju Yorulmazer's Ph.D. dissertation at the Department of Economics of New York University. We would like to thank the C.V. Starr Center for Applied Economics and the Center for Experimental Social Science (CESS) for their financial support. We are grateful to Franklin Allen, Markus Brunnermeier, Guillaume Frechette, Douglas Gale, Stephen Morris, Hyun Shin and two anonymous referees for the Journal of Financial Intermediation (JFI) and Ernst-Ludwig von Thadden (editor of JFI) for useful suggestions. We would like to acknowledge the programming help of Kishore Metla and Mustafa Yavuz. We also thank Marina Agranov for excellent research assistance. Finally, the participants of the Workshop on Experimental Economics at CREED of University of Amsterdam, CESS Brown Bag Lunch Seminar, the NYU Stern School of Business Macro Lunch Seminar, the Seminar at Tilburg University, the ESEM 2004 meetings in Madrid, and the International Summer Festival on Game Theory at Stony Brook also made valuable suggestions. ",
year = "2009",
month = apr,
doi = "10.1016/j.jfi.2008.06.002",
language = "English (US)",
volume = "18",
pages = "217--241",
journal = "Journal of Financial Intermediation",
issn = "1042-9573",
publisher = "Academic Press Inc.",
number = "2",
}