Herding and bank runs

A-Tier
Journal: Journal of Economic Theory
Year: 2011
Volume: 146
Issue: 1
Pages: 163-188

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Traditional models of bank runs do not allow for herding effects, because in these models withdrawal decisions are assumed to be made simultaneously. I extend the banking model to allow a depositor to choose his withdrawal time. When he withdraws depends on his consumption type (patient or impatient), his private, noisy signal about the quality of the bank's portfolio, and the withdrawal histories of the other depositors. Some of these runs are efficient in that the bank is liquidated before the portfolio worsens. Others are not efficient; these are cases in which the herd is misled.

Technical Details

RePEc Handle
repec:eee:jetheo:v:146:y:2011:i:1:p:163-188
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25