A Diamond-Dybvig Model Without Bank Run: the Power of Signaling

This paper introduces the possibility of signaling into a finite-depositor version of the Diamond-Dybvig model. More precisely, the decision to keep the funds in the bank is assumed to be unobservable,but depositors are allowed to make it observable by signaling, at a cost. Depositors decide consecutively whether to withdraw their funds or continue holding balances in the bank, and they choose if they want to signal the latter decision. If the cost of signaling is moderate, then bank runs do not occur. Moreover,no signals are made, so the unconstrained-efficient allocation is implemented without any costs.bank run; sequential game; signaling; iterated deletion of strictly dominated strategies; coordination.

Coordination structures

We study a coordination problem where agents act sequentially. Agents are embedded in an observation network that allows them to observe the actions of their neighbors. We find that coordination failures do not occur if there exists a sufficiently large clique. Its existence is necessary and sufficient when agents are homogenous and sufficient when agents differ and their types are private. Other structures guarantee coordination when agents decide in some particular sequences or for particular payoffs. The coordination problem embodied in our game is applied to the problems of revolts and bank runs.social networks; coordination failures; multiple equilibria; revolts; bank runs

Un modelo de Diamond y Dybvig sin pánico bancario: El poder de la señalización

This paper introduces the possibility of signaling into a fi nite-depositor version of the Diamond-Dybvig model. More precisely, the decision to keep the funds in the bank is assumed to be unobservable, but depositors are allowed to make it observable by signaling, at a cost. Depositors consecutively decide whether to withdraw their funds or continue holding balances in the bank, and they choose if they want to signal the latter decision. If the cost of signaling is moderate, then bank runs do not occur. Moreover, in the unique outcome no signals are made, so the unconstrained-effi cient allocation is implemented without any costsEl presente trabajo introduce la posibilidad de la señalización en una versión del modelo de Diamond y Dybvig con un número limitado de depositantes. Más concretamente, se presupone que la decisión de mantener los fondos en el banco no es observable, pero los depositantes pueden hacerlo mediante la señalización, que estaría sujeta a un coste. Los depositantes deciden de forma consecutiva si desean retirar sus fondos o seguir manteniendo saldos en el banco, así como si desean señalizar esta última decisión. Si el coste de señalización es reducido, no tiene lugar el pánico bancario. Por otra parte, no se emite ninguna señal en el único equilibrio, por ello se aplica la asignación efi ciente sin restricciones sin que suponga ningún cost

Topological phase transitions in bulk

We consider the analogy between the topological phase transition which occurs as a function of spatial coordinate on a surface of a non-trivial insulator, and the one which occurs in the bulk due to the change of internal parameters (such as crystal field and spin-orbit coupling). In both cases the system exhibits a Dirac cone, which is the universal manifestation of topological phase transition, independently on the type of driving parameters. In particular, this leads to a simple way of determining the topological class based solely on the bulk information even for the systems with translational symmetry broken by atomic disorder or by strong electron correlations. Here we demonstrate this on example of the zinc-blende related semiconductors by means of the {\it ab-initio} fully-relativistic band structure calculations involving the coherent potential approximation (CPA) technique.Comment: Phys. Status Solidi RRL, DOI 10.1002/pssr.2012064xx (2012), submitte

Do social networks prevent bank runs?

We develop, both theoretically and experimentally, a stereotypical environment that allows for coordination breakdown, leading to a bank run. Three depositors are located at the nodes of a network and have to decide whether to keep their funds deposited or to withdraw. One of the depositors has immediate liquidity needs, whereas the other two depositors do not. Depositors act sequentially and observe others actions only if connected by the network. Theoretically, a link connecting the first two depositors to decide is sufficient to avoid a bank run. However, our experimental evidence shows that subjects¿ choice is not affected by the existence of the link per se. Instead, being observed and the particular action that is observed determine subjects¿ choice. Our results highlight the importance of initial decisions in the emergence of a bank run. In particular, Bayesian analysis reveals that subjects clearly depart from predicted behavior when observing a withdrawal.bank runs, coordination failures, experimental evidence, networks

Austrian High-Performance-Computing meeting (AHPC2020)

This booklet is a collection of abstracts presented at the AHPC conference

Economic preferences in the classroom - research documentation

In this paper, we document how we carried out a research that aimed at measuring the economic preferences of high school students. We describe the preferences that we study and what experimental games we used to investigate them. Then we report how we carried out the experiments in the schools. We provide detailed descriptive statistics on the preferences in aggregate and also school by school. Last, we validate our measurement by comparing the measured preferences to those in the literature