Moral Hazard in a model of Bank Run with Noisy Signals
AbstractWe show that multiple equilibria exist in a model of bank run with moral hazard. Furthermore, this is true even with noisy signals on the economic fundamentals. We argue that the conditions under which this happens can arise naturally in models of banking with moral hazard problem.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 27.
Date of creation: 04 Jun 2003
Date of revision:
banking; fundamentals; signals; equilibria;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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