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Social network structures and bank runs

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  • Shouwei Li

    (School of Economics and Management, Southeast University)

  • Jiaheng Li

    (School of Economics and Management, Southeast University)

Abstract

This paper investigates the impact of social network structures of depositors on bank runs. The analyzed network structures include random networks, small-world networks and scale-free networks. Simulation results show that the probability of bank run occurrence in random networks is larger than that in small-world networks, but the probability of bank run occurrence in scale-free networks drops from the highest to the lowest among the three types of network structures with the increase of the proportion of impatient depositors. The average degree of depositor networks has a significant impact on bank runs, but this impact is related to the proportion of impatient depositors and the confidence levels of depositors in banks.

Suggested Citation

  • Shouwei Li & Jiaheng Li, 2016. "Social network structures and bank runs," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 89(5), pages 1-5, May.
    • Handle: RePEc:spr:eurphb:v:89:y:2016:i:5:d:10.1140_epjb_e2016-60966-0
    DOI: 10.1140/epjb/e2016-60966-0
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    Cited by:

    1. Haifei Liu & Tingqiang Chen & Zuhan Hu, 2017. "Dynamic Evolution of Securities Market Network Structure under Acute Fluctuation Circumstances," Complexity, Hindawi, vol. 2017, pages 1-11, November.
    2. Chen, Tingqiang & Wang, Yutong & Zeng, Qianru & Luo, Jun, 2020. "Network model of credit risk contagion in the interbank market by considering bank runs and the fire sale of external assets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 542(C).

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    Keywords

    Statistical and Nonlinear Physics;

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