Bank choice, bank runs, and coordination in the presence of two banks

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, even though it may be more vulnerable to bankruptcy if some agents withdraw early. We use an individual evolutionary learning algorithm to model under which circumstances and with which beliefs agents can learn the Nash equilibrium in the repeated game and compare the results to an experiment. We find participants coordinating on the Nash equilibrium in the presence of low or medium vulnerability banks, but efficient coordination fails when both banks are highly vulnerable (irrespective of whether participants have full or only partial information).

Authors

Institutions

Publication Details

Journal
Journal of Economic Behavior & Organization
Published
2024-08-05
DOI
https://doi.org/10.1016/j.jebo.2024.06.031
Citations
1
Primary Topic
Banking stability, regulation, efficiency
Type
article
Field-Weighted Citation Impact
0.54

Funders

Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Bank choice, bank runs, and coordination in the presence of two banks

Anita Kopányi-Peuker, Johan de Jong, Jasmina Arifovic
1 citations
Journal of Economic Behavior & Organization
Banking stability, regulation, efficiency
0.54
article

Bank choice, bank runs, and coordination in the presence of two banks

Anita Kopányi-Peuker, Johan de Jong, Jasmina Arifovic
article en
1 citations

Abstract

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, even though it may be more vulnerable to bankruptcy if some agents withdraw early. We use an individual evolutionary learning algorithm to model under which circumstances and with which beliefs agents can learn the Nash equilibrium in the repeated game and compare the results to an experiment. We find participants coordinating on the Nash equilibrium in the presence of low or medium vulnerability banks, but efficient coordination fails when both banks are highly vulnerable (irrespective of whether participants have full or only partial information).

Journal of Economic Behavior & OrganizationVol. 225
Radboud University Nijmegen (NL), Simon Fraser University (CA), Erasmus University Rotterdam (NL)
Universiteit van Amsterdam, Simon Fraser University
Decent work and economic growth
Openalex Percentile: Top 32%
Banking stability, regulation, efficiency
0.54
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.

Bank choice, bank runs, and coordination in the presence of two banks — Anita Kopányi-Peuker, Johan de Jong, et al. · Journal of Economic Behavior & Organization (2024) | TGRS Research Map | TGRS