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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Year of publication:	2011
Authors:	Balkenborg, Dieter ; Kaplan, Todd ; Miller, Timothy
Published in:	The Journal of Economic Education. - Taylor & Francis Journals, ISSN 0022-0485. - Vol. 42.2011, 3, p. 224-242
Publisher:	Taylor & Francis Journals

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010622905