Panic bank runs

Article

Kiss, H., Rodriguez-Lara, I. and Rosa-García, A. 2018. Panic bank runs. Economics Letters. 162, pp. 146-149. https://doi.org/10.1016/j.econlet.2017.11.014
TypeArticle
TitlePanic bank runs
AuthorsKiss, H., Rodriguez-Lara, I. and Rosa-García, A.
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.

PublisherElsevier
JournalEconomics Letters
ISSN0165-1765
Publication dates
Online20 Nov 2017
Print01 Jan 2018
Publication process dates
Deposited13 Nov 2017
Accepted10 Nov 2017
Output statusPublished
Publisher's version
License
Copyright Statement

© 2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Digital Object Identifier (DOI)https://doi.org/10.1016/j.econlet.2017.11.014
LanguageEnglish
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