Sequential decisions in the Diamond-Dybvig banking model

Markus Kinateder and Hubert Janos Kiss

No 1345, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We study the Diamond-Dybvig model of financial intermediation (JPE, 1983) under the assumption that depositors have information about previous decisions. Depositors decide sequentially whether to withdraw their funds or continue holding them in the bank. If depositors observe the history of all previous decisions, we show that there are no bank runs in equilibrium independently of whether the realized type vector selected by nature is of perfect or imperfect information.

Keywords: Bank Run; Imperfect Information; Perfect Bayesian Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D82 G21 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2013-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Sequential decisions in the Diamond–Dybvig banking model (2014)
Working Paper: Sequential decisions in the Diamond-Dybvig banking model (2012)
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