Bank Run

Bank runs (Rod Garratt, UCSB and Todd Keister, ITAM, MEXICO)

In work funded by the UC MEXUS-CONACYT collaborative grant program Rod Garratt (UCSB) and Todd Keister (ITAM) are conducting experiments to determine what market conditions are conducive to bank runs. The baseline treatment is a coordination game: the mutually preferred equilibrium outcome is for everyone to leave their money deposited in the bank, but there is also an equilibrium in which everyone requests early withdrawal. Two variations on the baseline treatment, involving random forced withdrawals, are run. In one of the variations there is aggregate uncertainty regarding the total number of forced-withdrawals, while in the other there is not. The treatments allow the experimenters to determine the impact of varying degrees (and types) of forced-withdrawal uncertainty on bank runs. The experiment is intended for groups of up to one hundred subjects. This is one of the reasons why the experiments are being conducted at the CASSEL experimental laboratory.

View bankrun-sample.txt.

Download bankrun-sample.txt.

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