COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1869 Runs, Panics and Bubbles: Diamond Dybvig and Morris Shin Reconsidered Eric Smith and Martin Shubik August 2012 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. |
