Ambiguity, Pessimism, Optimism and Financial Crises in a Simple Global Game Model

Daniel Laskar ()

PSE Working Papers from HAL

Abstract: We use a non-Bayesian approach to uncertainty which allows for both optimism and pessimism in a simple global game, where each signal can exhibit a bias which is ambiguous. We underline a symmetry between two models of financial crises: a liquidity crisis model, and a currency crisis model. We show that one model with pessimism becomes similar to the other model with optimism, and vice versa, which leads ambiguity to have opposite effects in the two models. We can also rationalize non-neutral effects of shifts in "market sentiment" in these models.

Keywords: Persistence; Global game; Financial crises; Ambiguity; Optimism; Pessimism; Market sentiment; Coordination (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://pjse.hal.science/hal-00811923v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://pjse.hal.science/hal-00811923v1/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:psewpa:hal-00811923

Access Statistics for this paper

More papers in PSE Working Papers from HAL
Bibliographic data for series maintained by CCSD ().