Teaching Bank Runs with Classroom Experiments

Dieter Balkenborg, Todd Kaplan and Timothy Miller

The Journal of Economic Education, 2011, vol. 42, issue 3, 224-242

Abstract: Once relegated to cinema or history lectures, bank runs have become a modern phenomenon that captures the interest of students. In this article, the authors explain a simple classroom experiment based on the Diamond-Dybvig model (1983) to demonstrate how a bank run—a seemingly irrational event—can occur rationally. They then present possible topics for discussion including various ways to prevent bank runs and moral hazard.

Date: 2011
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Citations: View citations in EconPapers (5)

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Working Paper: Teaching Bank Runs with Classroom Experiments (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jeduce:v:42:y:2011:i:3:p:224-242

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DOI: 10.1080/00220485.2011.581936

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