Who withdraws first? Line formation during bank runs

We study how lines form in front of banks. In our model, depositors choose first the level effort to arrive early at bank and then whether or not withdraw their deposit. argue that informational environment (i.e., possibility observing action others) affects emergence runs should, therefore, influence line formation. test this prediction experimentally. While has no effect on formation when we look average effort, findings suggest reasons varies across environment. Thus, expectations occurrence run are key explain cannot observe others. setting, who expect a funds. If actions can be observed, however, those keep funds deposited. Depending environment, there other factors (e.g., irrationality loss aversion) also behavior depositors.