Analysis of the Korean Bank Run Phenomenon Based on Game Theory

Abstract

At the beginning of 2011, a number of savings banks in South Korea experienced a liquidation crisis, which caused widespread global concern. This paper attempts to use the relevant basis of game theory to explain the Korean bank run in 2011. From the perspective of the causes of bank runs, this paper makes a game analysis of the actual results of bank runs. The research results show that the main reason for bank runs is depositors' distrust of banks, so when banks face a run, they should strive to become a powerful bank. However, depositors trust strong banks more. Using the tools of game theory analysis, a basic description of the behavioral characteristics of the subjects involved in the process of bank runs can provide possible options for preventing and resolving bank run crises. This study has important practical significance for the healthy and sustainable development of the banking industry.