Professor Glenn Ellison, a leader in the fields of economic theory, industrial organization and financial economics, has been named the inaugural holder of the Gregory K. Palm '70 Professorship in Economics.
The new professorship was endowed by Gregory K. Palm , a 1970 graduate of the MIT economics department and a member of its visiting committee. He graduated from the joint J.D./M.B.A. program at Harvard and subsequently clerked for Judge Henry Friendly of the 2nd U.S. Circuit Court of Appeals and for Supreme Court Justice Lewis Powell. Palm is currently the general counsel at Goldman Sachs in New York and a member of the firm's management committee.
Ellison, who received his Ph.D. from the MIT economics department in 1992, taught at Harvard for two years before joining the MIT faculty in 1994. He has made fundamental contributions in several subfields of economics. Ellison is internationally recognized for his theoretical analysis of learning in games. He has been particularly influential in identifying how social networks and other institutions that affect communication between market participants affect the speed of learning and the ultimate determination of market equilibrium.
Ellison's contributions in industrial organization include one of the classic studies of cartel behavior, a detailed analysis of the pricing behavior of the 19th-century New York-to-Chicago railroad cartel, as well as several more contemporary studies of pricing policy. In collaboration with his wife, MIT economics Senior Lecturer Sara Ellison (MIT Ph.D. 1993), he has explored the behavior of both Internet shoppers and Internet sellers. This work highlights the role of buyer search and seller obfuscation in Internet markets, and it also demonstrates the importance of tax avoidance as a motive for Internet purchases.
Ellison has also made important contributions in financial economics, where he has studied incentive and agency problems in the mutual fund industry. He has demonstrated that mutual fund managers change the risk profile of their investments in reaction to opportunities for securing a place in the top echelon of fund performers for a given year. Managers at funds that are just outside the top ranks as the year-end approaches take greater risks than comparable managers at funds that are already in the top ranking positions, or than managers at funds that are already virtually assured a low ranking.
Ellison has been an active contributor to the educational mission of the MIT economics department, winning the department's graduate teaching award five times in the last dozen years. He has also served as editor of Econometrica, the premier economics journal for research on economic theory and econometrics.
A version of this article appeared in MIT Tech Talk on April 4, 2007 (download PDF).