Sophisticated banking contracts and fragility when withdrawal information is public
研究了当银行使用复杂合约且提款决策公开时，自我实现的银行挤兑是否可能发生，发现若分配规则严格激励相容，则不会发生挤兑。
I study whether self‐fulfilling bank runs can occur when banks use sophisticated contracts and withdrawal decisions are public information. In a finite‐agent version of Diamond and Dybvig (1983) with correlated types, I first present an example in which a bank run perfect Bayesian equilibrium exists. However, its existence relies on off‐path beliefs that are unreasonable in terms of forward induction. To discipline beliefs, I use forward induction equilibrium (Cho (1987)) as the solution concept. I show that, whenever the allocation rule is strictly incentive compatible, the truth‐telling strategy is the unique forward induction equilibrium in the withdrawal game, and no bank run occurs. Therefore, with forward induction, sophisticated contracts can prevent bank runs when there is public information about withdrawal decisions.