I think that is an important part of the explanation for why the IMF found it so difficult to respond to the Asian crisis, and why its critics contend so vigorously that the IMF “got it wrong” in Asia. In essence, the Fund was confronted with a set of problems that were, in many respects, new and unfamiliar.
Although Option 4 seems to be a no-brainer, the Nash equilibrium answer is that both prisoners should betray each other. Think about it. So far, I have attempted to characterise how market participants may be interacting with each other. Let me now turn to how others look at you. The general unsuspecting public associates you with a certain aura, a certain angle of poise.