Teaching Bank Runs with Classroom Experiments

Dieter Balkenborg, Todd Kaplan and Tim Miller

MPRA Paper from University Library of Munich, Germany

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

Keywords: bank runs; multiple equilibria (search for similar items in EconPapers)
JEL-codes: A22 C92 G21 (search for similar items in EconPapers)
Date: 2009-01-12
New Economics Papers: this item is included in nep-exp and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Teaching Bank Runs with Classroom Experiments (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:18635

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