Optimal stopping in a model of speculative attacks

When faced with a speculative attack, banks and governments often hesitate, attempting to withstand the attack but giving up after some time, suggesting they have some ex-ante uncertainty about the attack they will face. I model that uncertainty as arising from incomplete information about speculators' payoffs and find conditions such that unsuccessful partial defences are possible equilibrium outcomes. There exist priors over the distribution of speculators' payoffs that can justify any possible partial defence strategy. With normal uncertainty, partial resistance is more likely when there is more aggregate uncertainty regarding agents' payoffs and less heterogeneity among them.