Brett Green
Assistant Professor
Haas School of Business
University of California Berkeley
Berkeley Haas
 



 
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Research Interests:
Information Economics, Financial Markets,

Dynamic Games and Contracts, Sports Economics

Contact Info:
Haas School of Business
UC Berkeley
545 Student Services, #1900
Berkeley, CA 94720-1900


Email: bgreen "at" haas.berkeley.edu
Status: On duty (Office Location: F645)




Published and Forthcoming Papers

In a dynamic lemons market where news is gradually revealed about the quality of the seller's asset, trade breaks down completely as both sides of the market wait for sufficient good news to restore fully efficient trade, or sufficient bad news eventually causes a low-type seller to trade at a low price with positive probability. Higher quality news may increase or decrease efficiency; it increases the speed of buyer learning but also provides more incentive for a high-type seller to hold out for a better price.

The presence of a noisy but informative grade/rating/review reduces the incentive to distinguish oneself through costly actions and leads to some degree of pooling. The equilibrium converges to the complete-information outcome as the distribution over the type space tends to a degenerate one---resolving a long-standing paradox in the signaling literature.

Uncertainty about whether other traders in the market are sophisticated informed traders or unsophisticated noise traders leads to a non-linear price that responds asymmetrically to news about fundamentals. The model nests both rational expectations (RE) and differences of opinions (DO) and highlights a link between disagreement about fundamentals and uncertainty about other traders.

We propose an information-based theory to explain time variation in liquidity. The equilibrium involves periods during which liquidity endogenously “dries up,” leading to an effective liquidation costs. Traders correctly anticipate such costs, reducing their willingness to pay, which leads to a novel feedback between prices and liquidity.

In a dynamic economy where capital must be reallocated following shocks to maximize productivity, adverse selection leads to slow moving capital, lagged investment and persistent misallocation of resources. The model generates a rich set of dynamics and provides a micro-foundation for convex adjustment costs.

Working Papers

We study a dynamic agency setting where multiple breakthroughs are required to complete a project.  When breakthroughs are observable and contractible, a breakthrough in one stage “extends the clock” giving the agent more time to complete the next stage. When breakthroughs are privately observed by the agent,  self-reported progress and ``soft deadlines" are required to implement the optimal contract.

When asset values are correlated, a trade by one seller is informative about the quality of other assets in the market. With sufficient market transparency, these information spillovers can lead to multiple equilibria. We study the welfare implications for policies that target market transparency.

We find strong evidence for a hot hand in Major League Baseball. The magnitudes are significant---being ``hot" corresponds to between one-half and one standard deviation. We also find that defenses respond to recent success in their opponents' batting performance. Our results suggest that teams use past performance in a manner consistent with drawing a correct inference, except for a tendency to overreact to very recent performance (i.e., the last 5 attempts).

Investment in a number of basic technologies (e.g., solar lights, cook stoves, fertilizer) appear to have large welfare benefi ts for many households in developing economies. Nevertheless, the development of markets and rate of adoption for these products has been slow. We develop a dynamic mechanism to overcome several frictions impeding development and test the mechanism using pilot studies in rural Uganda.

In Progress