**2. Theoretical deliberations of the economic game**

This section provides a theoretical background that motivates the economic game. First, based on the theoretical predictions of the game-theoretic model of Morris and Shin [1], we develop the framework that will be used in the experimental design. Then, within this framework, we derive the main results.

#### **2.1 Speculative attack as a coordination game under heterogeneous information**

Speculative attacks can be modeled as a coordination game with strategic complementarities. In the experiment, we employ a simple beauty contest model of Morris and Shin [1] with a finite number of economic agents N who decide simultaneously whether to attack or not.<sup>2</sup> Let us Y denote the fundamental state of the economy. The higher Y is, the better the state of the economy.

The gains of agents are given as follows:

	- Y, if the proportion of agents who attach exceeds a(Y).
	- 0, if the attack fails

Agents decide to attack or not based on two types of information (signals) given the state of the economy Y. Hence, the central bank disseminates posterior private and public information, where the public signal *<sup>Z</sup>=<sup>Y</sup>* ! *<sup>N</sup>* 0, *<sup>σ</sup>*<sup>2</sup> *η* . Individually, they

<sup>2</sup> It is a concept developed by Keynes [18] to explain the fluctuations in equity markets. It is the view that much of investment is driven by the expectations about what other investors think, rather than expectations about the fundamental profitability.

receive private signals *xi* ! *<sup>N</sup>* 0, *<sup>σ</sup>*<sup>2</sup> *ε* . Morris and Shin [19] and Hellwig [20] show that there is a unique equilibrium with a critical state below which currency crisis occurs with certainty, that provided private information is sufficiently precise relative to the public information. Metz [21] showed that the signals' interaction may have adverse effects. Her theoretical predictions can be summarized as follows:

