Information dynamics and equilibrium multiplicity in global games of regime change
By: George-Marios Angeletos, Christian Hellwig, Alessandro Pavan.
Contributors: Hellwig, Christian.; Pavan, Alessandro.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11017; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11017.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Crises.; Game theory.
Description: "Global games of regime change - 2013 that is, coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it - have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change.  We extend the static benchmark examined in the literature by allowing agents to accumulate information over time and take actions in many periods.  It is shown that dynamics may lead to multiple equilibria under the same information assumptions that guarantee uniqueness in the static benchmark.  Multiplicity originates in the interaction between the arrival of information over time and the endogenous change in beliefs induced by the knowledge that the regime survived past attacks.  This interaction also generates interesting equilibrium properties, such as the possibility that fundamentals predict the eventual regime outcome but not the timing or the number of attacks, or that dynamics alternate between crises and phases of tranquility without changes in fundamentals"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/4/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.