volume 18, issue 4, P462-478 2002
DOI: 10.1093/oxrep/18.4.462
View full text
F. Heinemann

Abstract: This paper compares theoretical predictions for a coordination game, used to explain the onset of a currency crisis, with observations from laboratory experiments. Theories that assume full rationality suggest that public information may destabilize an economy by creating self-fulfilling belief equilibria, while private information leads to a unique equilibrium. In experiments, differences in behaviour for these two kinds of information are small. Public information increases efficiency and coordination among …

expand abstract