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Beliefs, Competition, and Bank Runs Author info | Abstract | Publisher info | Download info | Related research | Statistics Ted Temzelides (Federal Reserve Bank of Philadelphia)
Bernandino Adao (University of Minnesota)
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Within the framework of Diamond-Dybvig (1983), the optimal (run free) outcome is shown to be the unique forward induction equilibrium. In a version of the model that posits Bertrand competition among banks, there are sequential equilibria that imply positive profits. However, the zero-profit contract is supported as the unique equilibrium outcome if the agents' beliefs are restricted to the space of beliefs consistent with the forward induction refinement.
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Paper provided by EconWPA in its series Finance with number
9511001.
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Length: 19 pages
Date of creation: 22 Nov 1995Date of revision:
Handle: RePEc:wpa:wuwpfi:9511001Note: 19 pages, TEX(SWP) fileContact details of provider: Web page: http://129.3.20.41
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Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory D8 - Microeconomics - - Information, Knowledge, and Uncertainty G - Financial Economics
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
J. Carlos Gonzalez-Pimienta & Cristian M. Litan, 2005.
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Economic Theory ,
Springer, vol. 35(3), pages 539-553, June.
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repec:bep:mactop:v:3:y:2003:i:1:p:1052-1052 is not listed on IDEAS
Guilherme Carmona, 2004.
"On the Existence of Equilibrium Bank Runs in a Diamond-Dybvig Environment ,"
Finance
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Other versions: Todd R. Kaplan, .
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Kaplan, T.R., 2000.
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Discussion Papers
00/14, University of Exeter, School of Business and Economics.
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[Downloadable!] (restricted) Carmona, Guilherme & Leoni, Patrick, 2003.
"Equilibrium Non-Panic Bank Failures ,"
FEUNL Working Paper Series
wp424, Universidade Nova de Lisboa, Faculdade de Economia.
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