09:15 - 11:00
Parallel track
Room: Maskeradezaal
Are sunspots effective in a large crowd? - Evidence from a large-scale bank run experiment
Anita Kopanyi-Peuker 1, 2, Cars Hommes 1, 2, Jasmina Arifovic 3, Isabelle Salle 4, 1
1 University of Amsterdam, CeNDEF, Amsterdam
2 Tinbergen Institute, Amsterdam
3 Simon Fraser University, Vancouver
4 Bank of Canada, Ottawa

This laboratory experiment investigates whether coordination on sunspots may arise among a large number of participants (80-90 subjects), and how this coordination may be influenced by the payoff and the sunspot structures. Our setup is a bank run game where withdrawing is the safe option, but waiting is the payoff-dominant strategy. Comparing behavior in small and large groups, we find major differences that equilibrium refinements fail to predict. Coordination on sunspots never happens in large groups, while it sometimes happens in small groups. Furthermore, coordination failures are systematic in large groups as soon as coordination on the Pareto-dominant equilibrium is risky enough. In contrast, small groups may still converge to the optimal equilibrium even when the safe option is relatively more attractive.


Reference:
Sa-Macroeconomics and finance-1
Session:
Macroeconomics and finance
Presenter/s:
Anita Kopanyi-Peuker
Room:
Maskeradezaal
Date:
Saturday, 4 May
Time:
09:15 - 11:00
Session times:
09:15 - 11:00