Sequential equilibrium and competition in a diamond-dybvig banking model

Bernardino Adão*, Ted Temzelides

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

9 Citações (Scopus)

Resumo

Within the framework of a Diamond-Dybvig model [J. Polit. Econ.91(1983), 401-419], but with explicitly modelling the autarky choice during the planning period, we demonstrate that a mixed strategy bank run equilibrium that does not rely on sunspots may coexist with the sunspot run equilibrium previously studied in the literature. In a version of the model with multiple banks, there exist sequential equilibria that imply positive profits. However, the zero-profit contract in which runs never occur can be supported as the unique equilibrium outcome if the agents play pure strategies only and their beliefs are restricted to be consistennt with a forward induction argument.Journal of Economic LiteratureClassification Numbers: C72, G21

Idioma originalEnglish
Páginas (de-até)859-877
Número de páginas19
RevistaReview of Economic Dynamics
Volume1
Número de emissão4
DOIs
Estado da publicaçãoPublicado - out. 1998
Publicado externamenteSim

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