Runs, Panics and Bubbles: Diamond-Dybvig and Morris-Shin Reconsidered

Eric Smith and Martin Shubik
Additional contact information
Eric Smith: Santa Fe Institute

No 1869, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: The basic two-noncooperative-equilibrium-point model of Diamond and Dybvig is considered along with the work of Morris and Shin utilizing the possibility of outside noise to select a unique equilibrium point. Both of these approaches are essentially nondynamic. We add an explicit replicator dynamic from evolutionary game theory to provide for a sensitivity analysis that encompasses both models and contains the results of both depending on parameter settings.

Keywords: Multiple equilibria; Runs; Replicator dynamics; Sensitivity analysis (search for similar items in EconPapers)
JEL-codes: C73 D84 E59 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2012-08
New Economics Papers: this item is included in nep-dge, nep-gth and nep-hpe
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Published in Annals of Finance (November 2014), 10(4): 603-622

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Related works:
Journal Article: Runs, panics and bubbles: Diamond–Dybvig and Morris–Shin reconsidered (2014)
Working Paper: Runs, Panics and Bubbles: Diamond Dybvig and Morris Shin Reconsidered (2012)
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