Title:
Runs, Panics and Bubbles: Diamond Dybvig and Morris Shin Reconsidered
Author(s):
Eric Smith, Martin Shubik
Paper #:
12-08-013
Date:
Aug. 24, 2012
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.
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