Edward J. Green

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Edward J. Green is an American economist best known for his contributions to the theory of dynamic contracts. Green received his Ph.D. from Carnegie Mellon University in 1977. He has previously taught at Princeton University and worked at the Federal Reserve Bank of Minneapolis, and the Federal Reserve Bank of Chicago, and is currently Professor of Economics at Pennsylvania State University.

Dr Green has written several influential articles. In a 1984 article written with Richard Porter published in Econometrica, Green showed when firms might deter entry by cutting prices. Their reasoning was that incumbent firms would cut prices when their costs were hard to observe for the potential entrant, so that the potential entrant would infer from the low prices that incumbents had low costs, making entry unprofitable. In a 1987 contribution ("Lending and the Smoothing of Uninsurable Income"), he studied the optimal consumption allocation that a planner would choose if he could not observe households' income, and that income was uncertain to households. The planner faces a trade-off between insuring households and enticing the households to reveal if they have had high or low income. Green showed that the allocation was related to Milton Friedman's permanent income theory. This contribution is one of the earliest in the economic field of dynamic contracts.

Ed Green is known for his very careful and logically tight reasoning.

An interview with Ed Green: http://www.minneapolisfed.org/pubs/region/05-12/green.cfm

Ed Green's web page: http://econ.la.psu.edu/people/biographies/green_bio.htm