Sequential decisions in the Diamond-Dybvig banking model

We study the Diamond-Dybvig model of financial intermediation (JPE, 1983) under the assumption that depositors have information about previous decisions. Depositors decide sequentially whether to withdraw their funds or continue holding them in the bank. If depositors observe the history of all previous decisions, we show that there are no bank runs in equilibrium independently of whether the realized type vector selected by nature is of perfect or imperfect information.

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Year of publication:	2013
Authors:	Kinateder, Markus ; Kiss, Hubert János
Publisher:	Budapest : Hungarian Academy of Sciences, Institute of Economics, Centre for Economic and Regional Studies
Subject:	Bank Run \| Imperfect Information \| Perfect Bayesian Equilibrium

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Series:	IEHAS Discussion Papers ; MT-DP - 2013/45
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
ISBN:	978-615-5447-06-8
Other identifiers:	774765054 [GVK] hdl:10419/108328 [Handle] RePEc:has:discpr:1345 [RePEc]
Classification:	C72 - Noncooperative Games ; D82 - Asymmetric and Private Information ; G21 - Banks; Other Depository Institutions; Mortgages
Source:	EconStor

Persistent link: https://www.econbiz.de/10010494573