Crises: Equilibrium Shifts and Large Shocks

• 成果类型: Article
• 署名作者: Morris, Stephen; Yildiz, Muhamet
• 署名单位: Princeton University; Massachusetts Institute of Technology (MIT)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20170159
• 发表日期: 2019
• 页码: 2823-2854
• 关键词: Global games; selection; rationalizability; multiplicity; INFORMATION

摘要

We study the informational events that trigger equilibrium shifts in coordination games with incomplete information. Assuming that the distribution of the changes in fundamentals has fat tails, we show that majority play shifts either if fundamentals reach a critical threshold or if there are large common shocks, even before the threshold is reached. The fat-tail assumption matters because it implies that large shocks make players more unsure about whether their payoffs are higher than others. This feature is crucial for large shocks to matter.