Should policy makers be prevented from bailing out investors in the event of a crisis? I study
this question in a model of financial intermediation with limited commitment. When a crisis …

1. Introduction hile the term “the Great Recession” has been loosely applied to almost every
economic downturn in the past twenty years, the crisis of 2007-09 has—more than most …

Are financial intermediaries–in particular, banks–inherently unstable or fragile, and if so,
why? We address this theoretically by analyzing whether model economies with financial …

We provide experimental evidence that panic bank runs occur in the absence of problems
with fundamentals and coordination failures among depositors, the two main culprits …

We study experimentally an instrument to prevent bank runs in healthy banks. In particular,
we extend the basic bank-run game, where depositors choose between withdrawing or …

This article reports an experiment conducted to evaluate the effects of alterations in the
terms of repayments to depositors following a liquidity suspension, as well as the effect of …

This paper studies depositor behavior in a bank run experiment with partial deposit
insurance. In the experiment, depositors face two forms of uncertainty regarding their deposit …

In the years since the financial crisis of 2008 and the associated bailouts of banks and other
financial institutions, policy makers in several jurisdictions have drafted rules requiring that …

Banks, as financial intermediaries play a significant role in the economic development of a
country, by facilitating the flow of funds from surplus economic units to deficit income units …

Abstract We study the Diamond–Dybvig model of financial intermediation (Diamond and
Dybvig, 1983) under the assumption that depositors have information about previous …