With a dirty float, on the other hand, certainty is replaced by uncertainty as a slight deviation in the exchange rate could simply be the result of noise and therefore unrelated to the government's capability of defending the peg. Uncertainty in this instance provides a clear advantage in defending a currency peg.
It is interesting to note that these observations are in complete accordance with studies on human psychology. In one famous experiment, students were broken into two groups and subjected to mild electric shocks. The first group received an audio cue which was randomly combined with the electric shock, whilst the second group would receive the shock once every tenth audio cue. The blood pressure and brainwave activities of both groups were measured. Unsurprisingly, the first group were permanently stressed, as they could not figure out when they would receive the next shock, whilst in the case of the second group, the stress level would only start building up after the eighth or ninth audio cue.
The human mind is not very good at coping with uncertainty but, like the currency peg example above, there are instances where uncertainty can be used as a very effective weapon. There are also instances where the contrary is true. Take the Greek debt crisis as an example. The European Union thought that the simple declaration that they would intervene if need be would suffice to keep speculators at bay. Wrong! The markets apparently did not take their word at face value, forcing them into disclosing the exact terms of the bailout. The markets seem to have reacted favorably to this additional "valuable" information but it is still too early to say if it will suffice to salvage what seems to be a sinking ship. The "black swan" adage would argue that just because such a default has never been observed in the past certainly does not mean it will never happen.
