Consider the Diamond-Dybvig model of bank runs as discussed in the course. Assume that the utility...

 

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Consider the Diamond-Dybvig model of bank runs as discussed in the course. Assume that the utility function is given by U(c) = √e and that the parameter values are R = 4, p = 1/3, and π = 2/5. How many agents are able to execute their claims in period 1 (i.e., withdraw the maximum amount they have been promised) in the bank run equilibrium? Consider the Diamond-Dybvig model of bank runs as discussed in the course. Assume that the utility function is given by U(c) = √e and that the parameter values are R = 4, p = 1/3, and π = 2/5. How many agents are able to execute their claims in period 1 (i.e., withdraw the maximum amount they have been promised) in the bank run equilibrium?