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.
He is a Fellow of the Econometric Society and has served on its Council and on the Editorial Board of Econometrica. He is a Fellow of the Society for the Advancement of Economic Theory, a Fellow of the American Academy of Arts and Sciences, an Erskine Fellow of the University of Canterbury (New Zealand), an Overseas Fellow of Churchill College (Cambridge University). He was a Guggenheim Fellow and a National Science Foundation Post-doctoral Fellow.
He chaired the National Science Foundation’s Information Sciences Advisory Panel, preparing the Foundation’s Ten-Year Outlook for the Social Sciences. He served as on the National Academy of Sciences Panel on Income Tax Compliance.
At Harvard, Professor Green is a Senior Fellow of the Harvard Society of Fellows, a Syndic of the Harvard University Press, an Honorary Associate of Lowell House, and chair of the Faculty Committee on Athletic Sports.
We take a decision theoretic approach to the classic social choice problem, using data on the frequency of choice problems to compute social choice functions. We define a family of social choice rules that depend on the population's preferences and on the probability distribution over the sets of feasible alternatives that the society will face. Our methods generalize the well-known Kemeny Rule. In the Kemeny Rule, it is known a priori that the subset of feasible alternatives will be a pair. We define a distinct social choice function for each distribution over the feasible subsets. Our rules can be interpreted as distance minimization—selecting the order closest to the population's preferences, using a metric on the orders that reflects the distribution over the possible feasible sets. The distance is the probability that two orders will disagree about the optimal choice from a randomly selected available set. We provide an algorithmic method to compute these metrics in the case where the probability of a given feasible set is a function only of its cardinality.
Marco Archetti, Francisco Ubeda, Drew Fudenberg, Jerry R. Green, Naomi E. Pierce and Douglas W. Yu
One of the main problems impeding the evolution of cooperation is partner choice. When information is asymmetric (the quality of a potential partner is known only to himself), it may seem that partner choice is not possible without signaling. Many mutualisms, however, exist without signaling, and the mechanisms by which hosts might select the right partners are unclear. Here we propose a general mechanism of partner choice, "screening," that is similar to the economic theory of mechanism design. Imposing the appropriate costs and rewards may induce the informed individuals to screen themselves according to their types and therefore allow a noninformed individual to establish associations with the correct partners in the absence of signaling. Several types of biological symbioses are good candidates for screening, including bobtail squid, ant-plants, gut microbiomes, and many animal and plant species that produce reactive oxygen species. We describe a series of diagnostic tests for screening. Screening games can apply to the cases where by-products, partner fidelity feedback, or host sanctions do not apply, therefore explaining the evolution of mutualism in systems where it is impossible for potential symbionts to signal their cooperativeness beforehand and where the host does not punish symbiont misbehavior.
A century ago, everyone thought time and distance were well defined physical concepts. But neither proved absolute. Instead, measures/reports of time and distance were found to depend on one's reference point, specifically one's direction and speed of travel, making our apparent physical reality, in Einstein's words, “merely an illusion.” Like time and distance, standard fiscal measures, including deficits, taxes, and transfer payments, depend on one's reference point/reporting procedure/language/labels. As such, they, too, represent numbers in search of concepts that provide the illusion of meaning where none exists. This paper, dedicated to our dear friend David Bradford, provides a general proof that standard and routinely used fiscal measures, including the deficit, taxes, and transfer payments, are economically ill-defined. Instead these measures reflect the arbitrary labeling of underlying fiscal conditions. Analyses based on these and derivative measures, such as disposable income, private assets, and personal saving, represent exercises in linguistics, not economics.
Green, Jerry R., and Lawrence Kotlikoff. "On the General Relativity of Fiscal Language." In Institutional Foundations of Public Finance, edited by Alan J. Auerbach and Daniel Shaviro. Harvard University Press, 2009.
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Green, J. R. "Strategic Use of Contracts with Third Parties." In Strategy and Choice, edited by R. J. Zeckhauser. Cambridge: MIT Press, 1991.
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Green, J. R. "Future Graduate Study and Academic Careers." In The Economics of Higher Education, edited by C. Clotfelter and M. Rothschild. Chicago: University of Chicago Press, 1991.
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Green, Jerry R., and Daniel A. Hojman. "Choice, Rationality and Welfare Measurement." Faculty Research Working Paper Series, No. 2144, November 2007.
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Green, Jerry R., and Laurence J. Kotlikoff. "On the General Relativity of Fiscal Language." NBER Working Paper Series, No. 12344, June 2006.
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We propose a family of measures of difference between ordinal preference relations. The difference between two preferences is the probability that they would disagree about the optimal choice from a random available set. It is in this sense that these measures are choice-based. Measures differ according to the distribution of the random available sets. We use these measures to propose new social choice rules that achieve maximal average assent among the members of the population. We also propose two further applications of these measures. The first is to welfare measurement when choice is irrational. The second is to the measurement of polarization in a population.
