Title

Runs, Panics and Bubbles: Diamond-Dybvig and Morris-Shin Reconsidered

Document Type

Discussion Paper

Publication Date

8-1-2012

CFDP Number

1869

CFDP 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.

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