Panic bank runs

Hubert Janos Kiss, Ismael Rodriguez-Lara and Alfonso Rosa-García

Economics Letters, 2018, vol. 162, issue C, 146-149

Abstract: We provide experimental evidence that panic bank runs occur in the absence of problems with fundamentals and coordination failures among depositors, the two main culprits identified in the literature. Depositors withdraw when they observe that others do so, even when theoretically they should not. Our findings suggest that panic also manifests itself in the beliefs of depositors, who overestimate the probability that a bank run is underway. Loss-aversion has a predictive power on panic behavior, while risk or ambiguity aversion do not.

Keywords: Bank runs; Beliefs; Panic; Coordination; Observability; Loss aversion (search for similar items in EconPapers)
JEL-codes: C7 C9 D8 G2 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176517304676
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Panic bank runs (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:162:y:2018:i:c:p:146-149

DOI: 10.1016/j.econlet.2017.11.014

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().