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In studies of bank runs the initial deposit decision is typically not taken into account. However, it is unlikely that people will entrust money to a bank that they expect to fail in the near future. The aim of this study is to investigate to what extent this mechanism prevents bank runs. It...
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There is an asymmetry regarding what previous decisions depositors may observe when choosing whether to withdraw or keep the money deposited: it is more likely that withdrawals are observed. We study how decision-making changes if depositors are able to make their decision to keep their funds in...
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occurs when there are too many early withdrawals. We explore the effects of adding uncertainty about fundamental withdrawal … when fundamental withdrawal demand is known but occur frequently when it is stochastic, and (ii) subjects are more likely …-opportunity case, we evaluate individual withdrawal decisions according to a set of simple cutoff rules.We find that the cutoff rule …
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We investigate learning in a repeated bank choice game, where agents first choose a bank to deposit in and then decide to withdraw that deposit or not. This game has a single Nash equilibrium in pure strategies, characterized by all agents depositing in the bank that offers the highest return,...
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