Experimental evidence of bank runs as pure coordination failures

  title={Experimental evidence of bank runs as pure coordination failures},
  author={Jasmina Arifovic and Janet Hua Jiang and Yiping Xu},
This paper investigates how the level of coordination requirement affects the occurrence of bank runs as a result of pure coordination failures in controlled laboratory environments. We find that miscoordination-based bank runs can be observed when the coordination parameter, defined as the amount of coordination among depositors choosing to wait that is required for them to receive a higher payoff than depositors who choose to withdraw, is high enough. In particular, we can divide the values… CONTINUE READING