Asymmetric Information and Bank Runs

Research, Preprint OPEN
Gu, Chao;
(2010)
  • Publisher: Cornell University, Center for Analytical Economics (CAE) Ithaca, NY
  • Subject: sunspot equilibrium | Bankenkrise | G21 | Asymmetrische Information | bank runs | correlated equilibrium | sunspot equilibrium, correlated equilibrium, imperfect coordination, imperfect information. | P11 | imperfect information | Spieltheorie | Theorie | D82 | randomizing device
    • jel: jel:G21 | jel:D82
      ddc: ddc:330

It is known that sunspots can trigger panic-based bank runs and that the optimal banking contract can tolerate panic-based runs. The existing literature assumes that these sunspots are based on a publicly observed extrinsic randomizing device. In this paper, I extend th... View more
  • References (4)

    [19] Manuelli, Rodolfo, and James Peck (1992) Sunspot-like Effects of Random Endowments. Journal of Economic Dynamics and Control 16, 193-206.

    [20] Morris, Stephen, and Hyun S. Shin (1998) Unique Equilibrium in a Model of Selffulfilling Currency Attacks. American Economic Review 88, 587-597.

    [21] Peck, James and Karl Shell (2003) Equilibrium Bank Runs. Journal of Political Economy 111, 103-123.

    [22] Postlewaite, Andrew and Xavier Vives (1987) Bank Runs as an Equilibrium Phenomenon. Journal of Political Economy 95, 485-491.

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