CFDP 1869
Runs, Panics and Bubbles: Diamond-Dybvig and Morris-Shin Reconsidered
Author(s):Publication Date: August 2012
Pages: 28
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
JEL Classification Codes: C73, D84, E59
See CFP: 1447