Coordination and communication during bank runs

Shakina, Ekaterina; Angerer, Martin

doi:10.1016/j.jbef.2018.09.002

Cited by 9 publications

(8 citation statements)

References 56 publications

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“…Our approach is also in line with recent research pointing out the importance of observability of actions in bank run episodes (e.g. see Starr and Yilmaz, 2007; Garratt and Keister, 2009; Schotter and Yorulmazer, 2009; Iyer et al , 2012; Kiss et al , 2014; Shakina and Angerer, 2018).…”

Section: Introductionsupporting

confidence: 84%

“…7. The experimental literature on bank runs includes, among others, Schotter and Yorulmazer (2009), Garratt and Keister (2009), Arifovic et al (2013), Kiss et al (2014, 2016b, 2018), Davis and Reilly (2016) or Shakina and Angerer (2018). The reader interested in this literature may also refer to Dufwenberg (2015), Duffy (2016) and Kiss et al (2016a).…”

Section: Notesmentioning

confidence: 99%

“…For example, Kiss et al (2018) showed that patient depositors tend to attribute previous withdrawals to other patient depositor, against the theoretical prediction. This behavior fosters further withdrawals of patient depositors, resulting in panic behavior (see also Kiss et al , 2014; Shakina and Angerer, 2018; for evidence of panic behavior).…”

Section: Introductionmentioning

confidence: 99%

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Does response time predict withdrawal decisions? Lessons from a bank-run experiment

Kiss

Rodríguez-Lara

Rosa‐García

2019

RBF

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Purpose The purpose of this paper is to analyze how response time in a laboratory experiment on bank runs affects withdrawal decisions. Design/methodology/approach In the authors’ setup, the bank has no fundamental problems, depositors decide sequentially whether to keep the money in the bank or to withdraw, and they may observe previous decisions depending on the information structure. The authors consider two levels of difficulty of decision-making conditional on the presence of strategic dominance and strategic uncertainty. The authors hypothesize that the more difficult the decision, the longer is the response time, and the predictive power of response time depends on difficulty. Findings The authors find that response time is longer in information sets with strategic uncertainty compared to those without (as expected), but the authors do not find such relationship when considering strategic dominance (contrary to the hypothesis). Response time correlates negatively with optimal decisions in information sets with a dominant strategy (contrary to the expectation) and also when decisions are obvious in the absence of strategic uncertainty (in line with the hypothesis). When there is strategic uncertainty, the authors find suggestive evidence that response time predicts optimal decisions. Research limitations/implications Being a laboratory experiment, it is questionable if depositors in real life behave similarly (external validity). Practical implications Since episodes of bank runs are characterized by strategic uncertainty, the result that under strategic uncertainty, longer response time leads to better decisions suggests that suspension of convertibility is a useful tool to curb banking panics. Originality/value To the best of authors’ knowledge, this is the first study concerning the relationship between response time and the optimality of decisions in a bank-run game.

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Section: Introductionsupporting

confidence: 84%

Section: Notesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does response time predict withdrawal decisions? Lessons from a bank-run experiment

Kiss

Rodríguez-Lara

Rosa‐García

2019

RBF

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“…Their results show that the effects of disclosure may point in opposite directions, depending on the re-contracting posture adopted by the banking authority. Shakina and Angerer (2018) study depositors' behavior in a much less restricted setting than previous studies. Their depositors can continuously withdraw and re-deposit funds without any order being enforced.…”

Section: Arifovicmentioning

confidence: 99%

Bank instability: Interbank linkages and the role of disclosure

König-Kersting

Trautmann

Vlahu

2022

Journal of Banking & Finance

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“…Hence, a convergence of these spheres appears, which makes intra, interactive and massive processes merge through interpersonal technological contexts in ways that are still in the process of being defined. This change allows us to recognise the capacity of human communication to make its dimensions of action more flexible, that is, the ineffectiveness of concepts such as identity, authorship, active sender, passive receiver, in the face of phenomena such as current digital convergence [37,40,50].…”

Section: Frameworkmentioning

confidence: 99%

Financial Technology: Review of Trends, Approaches and Management

et al. 2020

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Technological innovation and digitization have posed a challenge to the financial sector globally. Fintech is the term used to designate the application of new technologies to financial services. The aim of the study is to analyse this research subject worldwide during the period 1975–2019. To this end, bibliometric techniques were applied to 2012 articles, obtaining findings of the productivity of scientific research, of the main thematic axes and their evolution. Scientific activity increased, mainly in the past decade, with 45% of publications. The main thematic areas were Business, Management and Accounting, Engineering, Social Sciences and Computer Science. Seven research lines were identified, aimed at analysing the aspects financial, economic, technology transfer, investment, innovation, partnerships and institutions and commercial. Future research lines should develop analyses on banking, financial services trade, territorial development, legal, management, research methodologies and the sustainability of financial technologies. It was verified that there is a growing and dynamic interest in scientific activity on financial technologies at an international level. The findings obtained are a complement to the knowledge of financial technologies and allow the relationship between science and technology to be established, and to inform the decision-making process.

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Coordination and communication during bank runs

Cited by 9 publications

References 56 publications

Does response time predict withdrawal decisions? Lessons from a bank-run experiment

Does response time predict withdrawal decisions? Lessons from a bank-run experiment

Bank instability: Interbank linkages and the role of disclosure

Financial Technology: Review of Trends, Approaches and Management

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