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Title:Speculative attacks: a laboratory study in continuous time PDF Logo
Authors:Cheung, Yin-Wong
Friedman, Daniel
Issue Date:2008
Series/Report no.:CESifo working paper 2420
Abstract:We examine speculative attacks in a controlled laboratory environment featuring continuous time, size asymmetries, and varying amounts of public information. Attacks succeeded in 233 of 344 possible cases. When speculators have symmetric size and access to information: (a) weaker fundamentals increase the likelihood of successful speculative attacks and hasten their onset, and (b) contrary to some theory, success is enhanced by public access to information about either the net speculative position or the fundamentals. The presence of a larger speculator further enhances success, and experience with large speculators increases small speculators' response to the public information. However, giving the large speculator increased size or better information does not significantly strengthen his impact.
Subjects:Currency crisis
speculative attack
laboratory experiment
coordination game
pre-emption
large player
JEL:F30
C73
C92
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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