Runs, panics and bubbles: Diamond-Dybvig and Morris-Shin reconsidered (Q481383)

The authors suggest a development of noncooperative game models in a financial market as proposed in [\textit{D. W. Diamond} and \textit{P. H. Dybvig}, J. Polit. Econ. 91, No. 3, 401--419 (1983; Zbl 1341.91135)] and [\textit{S. Morris} and \textit{H. S. Shin}, ``Unique equilibrium in a model of self-fulfilling currency attacks'', Am. Econ. Rev. 88, 587--597 (1998), \url{http://www.jstor.org/stable/116850}]. They analyze a simplified model at three levels: in the original Nash equilibrium with implicit expectations, in a correlated subgame perfect equilibrium of the corresponding extensive form, and use a replicatior dynamic to identify subgame fixed points and their stability.