To understand the mechanisms behind bank run contagions, we conduct bank run experiments in a modified Diamond–Dybvig setup with two banks (Left and Right). The banks׳ liquidity levels are either linked or independent. Left Bank depositors see their bank׳s liquidity level before deciding....

Gift giving is thought to decrease welfare. Recipients are sometimes stuck with gifts they would not have purchased because the giver does not perfectly know the recipient's preferences and in-kind gifts cannot be costlessly refunded. Such gifts are welfare reducing compared to giving cash if,...