Teaching Bank Runs with Classroom Experiments
Once relegated to cinema or history lectures, bank runs have become a modern phenomenon that captures the interest of students. In this article, the authors explain a simple classroom experiment based on the Diamond-Dybvig model (1983) to demonstrate how a bank run—a seemingly irrational event—can occur rationally. They then present possible topics for discussion including various ways to prevent bank runs and moral hazard.
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Volume (Year): 42 (2011)
Issue (Month): 3 (July)
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References listed on IDEAS
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- Todd Kaplan, 2006.
"Why banks should keep secrets,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(2), pages 341-357, January.
- Todd R. Kaplan, "undated". "Why Banks Should Keep Secrets," Working papers _005, University of Minnesota, Department of Economics.
- Kaplan, T.R., 2000. "Why Banks Should Keep Secrets," Discussion Papers 0014, Exeter University, Department of Economics.
- Shy Oz & Stenbacka Rune, 2008. "Rethinking the Roles of Banks: A Call for Narrow Banking," The Economists' Voice, De Gruyter, vol. 5(2), pages 1-4, June. Full references (including those not matched with items on IDEAS)