to the theory literature by characterizing a new circulation regime where agents use the foreign currency solely for …

device. This paper investigates how people react to sunspots in the context of a bank-run game in a controlled laboratory … parameter. Although theory predicts that sunspot equilibria exist in all treatments, strong responses to sunspots only occur in …

We report experimental evidence on the effect of observability of actions on bank runs. We model depositors' decision … depositors' actions only if connected by the network. Theoretically, a sufficient condition to prevent bank runs is that the … observability of actions affects the likelihood of bank runs, but depositors' choice is highly influenced by the particular action …