On run-preventing contract design

Yoshihiro Ohashi

doi:10.1515/bejte-2014-0007

On run-preventing contract design

Yoshihiro Ohashi^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

This study considers how to implement an efficient allocation of a financial intermediation model, including liquidation costs. The main result shows that there is a mechanism such that, for any liquidation cost, an efficient allocation is implementable in strictly dominant strategies. There is no need for third-party assistance, such as deposit insurance. In addition, the mechanism is tolerant of a small, unexpected shock caused by premature withdrawals.

Original language	English
Pages (from-to)	63-72
Number of pages	10
Journal	B.E. Journal of Theoretical Economics
Volume	15
Issue number	1
DOIs	https://doi.org/10.1515/bejte-2014-0007
Publication status	Published - 2014 Dec 1

Keywords

bank runs
Deposit contracts
implementation
mechanism design
strategy-proof

ASJC Scopus subject areas

Economics, Econometrics and Finance(all)

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10.1515/bejte-2014-0007

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KW - strategy-proof

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On run-preventing contract design

Abstract

Keywords

ASJC Scopus subject areas

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