A Classroom Experiment on Banking
AbstractThis classroom experiment uses double oral auction credit markets to illustrate the role of banks as financial intermediaries. The experiment demonstrates how risk affects market interest rates in the presence of asymmetric information. It provides fodder for a discussion of the moral-hazard problem of deposit insurance and its impact on depositor and bank behavior. The basic experiment can be extended to include the effect of political risk on credit markets. The experiment can be used in principles, intermediate macroeconomics, or money and banking courses with 8--75 students. It takes 50--75 minutes to run, depending on class size, and requires no computers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 43 (2012)
Issue (Month): 2 (April)
Contact details of provider:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jonathan E. Alevy & Paul Ronald Johnson, 2013. "A Classroom Financal Market Experiment," Working Papers 2013-01, University of Alaska Anchorage, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.