Speculative Attacks with Multiple Sources of Public Information

Research, Book, Preprint English OPEN
Cornand, Camille ; Heinemann, Frank (2005)
  • Publisher: Sonderforschungsbereich/Transregio 15 Governance and the Efficiency of Economic Systems München
  • Related identifiers: doi: 10.5282/ubm/epub.13394
  • Subject: Public and private information | F31 | Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems | Speculative attack | Multiple equilibria | Speculative attack; Coordination game; Multiple equilibria; Public and private information; Transparency | Speculative attack; Private value game; Multiple equilibria; Public and private information | Private value game | HB Economic Theory | C3 - Innovationen in Informationstechnologien und Regulierung von Finanzmärkten | D82
    • jel: jel:F31 | jel:D82
      ddc: ddc:330

We propose a speculative attack model in which agents receive multiple public signals. It is characterised by its focus on an informational structure, which sets free from the strict separation between public information and private information. Diverse pieces of public information can be taken into account differently by players and are likely to lead to different appreciations ex post. This process defines players’ private value. The main result is to show that equilibrium uniqueness depends on two conditions: (i) signals are sufficiently dispersed (ii) private beliefs about the relative precision of these signals sufficiently differ. We derive some implications for information dissemination policy. Transparency in this context is multi-dimensional: it concerns the publicity of announcements, the number of signals disclosed as well as their precision. Especially, it seems that the central bank has better not publishing its forecast errors in order to maintain stability. An illustration to our analysis is the recent debate concerning the optimal monetary policy committee structure of central banks. Keywords: Speculative attack – coordination game – multiple equilibria – public and private information – transparency. JEL Classification: F31 – D82.
  • References (11)
    11 references, page 1 of 2

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