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Jerry Green

David A. Wells Professor of Political Economy, John Leverett Professor, Harvard University

Jerry Green is the John Leverett Professor in the University and the David A. Wells Professor of Political Economy in the Department of Economics.
 
His current research is focused on principles of equity in collective decision-making, the use of irrational choice data to evaluate economic well-being and the revision of beliefs in the presence of logically inconsistent information. 
In the 1970s Professor Green developed the theory of rational expectations equilibrium, focusing on the externalities due to observations of events that propagate through the system when agents extract information from prices. He showed that the theory is extremely fragile because equilibria are likely not to exist or, when they do exist, they may be unreasonably sensitive to errors in the data.
 
Later in the 1970s and continuing through the 1990s, working with Jean-Jacques Laffont, he explored the properties of dominant strategy mechanisms that implement efficient collective outcomes. They characterized the limitations of these mechanisms and examined how they might be improved under Bayesian incentive compatibility or by taking a sample of the population whose responses determine a decision affecting the entire population. He applied the theory of incentives to employment contracts and to general bilateral contracts with uncertainty on both sides of the market.
 
Professor Green pioneered the study of how changes in the quality of information affect economic outcomes in general equilibrium theory with incomplete futures markets and in two-person games, providing one of the first examples of what are now called “cheap-talk games”.
 
Outside of pure economic theory, Professor Green wrote on many topics in applied microeconomics, primarily in public finance. His work on taxation explored capital gains, dividend policies of firms, income taxation in inflationary environments, banking and the mortgage market,  inventory accumulation, and the risk analysis of pension plans. He also contributed to corporate finance, writing one of the first papers to use game theoretic methods to model early-stage entrepreneurial investment. With Suzanne Scotchmer, he worked on patent policy in dynamic environments. 
 
Over the past 20 year, he has worked primarily on theoretical models of behavioral and normative economics. He has written on voting theory, fair division problems in collective decision-making, and choice under uncertainty without the independence axiom.
 
Throughout his career, he has been devoted to the teaching of microeconomic theory at the graduate level. His book, coauthored with Andreu Mas-Colell and Michael Whinston, Microeconomic Theory, is the leading textbook used in first-year Ph.D. courses around the world. He was awarded the J.K. Galbraith Prize for graduate teaching.
 
Professor Green joined the Harvard Economics Department after receiving his Ph.D. from the University of Rochester in 1970. He chaired the Economics Department from 1984 to 1987 and served as Provost of the University from 1992 to 1994.