David K. Levine

John H. Biggs Distinguished Professor of Economics, Washington University in St. Louis

David K. Levine is John H. Biggs Distinguished Professor of Economics at Washington University in St. Louis. He is a fellow of the Econometric Society, research associate of the NBER, and managing editor of NAJ Economics. His scientific research is supported by grants from the National Science Foundation. He is the author with Michele Boldrin of Against Intellectual Monopoly, with Drew Fudenberg of Learning in Games and the editor of several conference volumes. He has published extensively in professional journals, including The American Economic Review, Econometrica, The Review of Economic Studies, The Journal of Political Economy, The Journal of Economic Theory, The Quarterly Journal of Economics, and The American Political Science Review. He previously taught at UCLA where he held the Armen Alchian Chair in Economic Theory and occasionally served as Chair of the Department. He has served as President of the Society for Economic Dyamics, as co-editor of Econometrica, Economic Theory and the Review of Economic Dynamics, as member of the American Economic Association Honors and Awards Committee, as member of the Sloan Research Fellowship Program Committee and as panelist for the National Science Foundation. He was program co-chair of the 2002 North American Summer Meetings of the Econometric Society, has served on various committees of the both the Econometric Society and American Economic Association. He has worked as research consultant for the Federal Reserve Bank of Minneapolis, helped found the journal Theoretical Economics, and was founding co-director of the CASSEL and MISSEL experimental laboratories.

Professor Levine's current research interests include the study of intellectual property and endogenous growth in dynamic general equilibrium models, models of self-control, of the endogenous formation of preferences, institutions and social norms, learning in games, and the application of game theory to experimental economics. At the graduate level, his teaching focuses on economic dynamics; at the undergraduate level, he teaches intermediate level microeconomics, focusing largely on elementary game theory.

Professor Levine received his undergraduate degree in Mathematics from UCLA in 1977, and was the recipient of the Daus Prize. At the same time he received a Master's degree in Economics. His graduate training was completed with a Ph.D. in Economics at MIT in 1981. His dissertation examined learning in repeated games. In addition to teaching at UCLA since 1981, Levine taught at the University of Minnesota in 1987-88 and visited at CalTech in 1990-91. He has presented seminars around the world, and has visited at Cambridge University, the University of Western Ontario, Carlos III University, Tel Aviv University, Torcuato Di Tella University, the University of Texas, Austin, the Chinese University of Hong Kong, Seoul National University and the University of Pennsylvania. He has made presentations to numerous government connected agencies, including the International Monetary Fund, the Bureau of Labor Statistics, the Canadian Ministry of Industry, the Canadian Ministry of Finance, and the Uruguayan Central Bank, and at private institutions, such as the Cato Institute.

In the early 1980's Levine worked with Timothy Kehoe on self-fulfilling prophecies in dynamic general equilibrium models. They and their collaborators established a series of results, showing that with a finite number of traders equilibria are, at least locally, unique. On the other hand, with overlapping generations of consumers, or other frictions, there can be many equilibria representing different self-fulfilling prophecies. Later researchers have used these models in an effort to explain a variety of macroeconomic phenomena.

Subsequently, Kehoe and Levine focused on the issue of asset market imperfections. Their research studied the endogenous debt limits that arise when individual borrowers can default on debt. This leads to a simple explanation of idiosyncratic risk bearing and low real interest rates. Recently, the model has been used to explore a variety of other asset market puzzles.

Levine's ongoing research in general equilibrium theory focuses on growth theory, innovation, and intellectual property. Together with Michele Boldrin, Levine has been studying the role of increasing returns in growth and innovation. There is little evidence for increasing returns at the aggregate level, and Boldrin and Levine argue that there is no reason to believe that increasing returns play an important role in growth. This theory has important implications as well for intellectual property, with the conclusion that existing claims for the necessity of intellectual property in the process of growth and innovation are greatly overstated.

Levine's other main area of research interest is dynamic games. Work in the mid-80s with Drew Fudenberg established that a long-lived player playing against short-lived opponents could substitute reputation for commitment. Together with Eric Maskin, they established the first "folk theorem" for games in which players do not directly observe each other's decisions. Subsequently, they turned to the issue of learning in games, culminating in a book published by MIT Press. They argued that while it is naive to believe that learning theories can provide detailed descriptions of non-equilibrium behavior, they are a useful tool in understanding which equilibria are likely to emerge. Recently they have applied the theory to examine how superstitions may survive in the face of rational learning.

Currently Levine is studying the endogenous formation of preferences and social norms. His analysis of experimental anomalies explores some of the limitations of the standard economic model of self-interested individuals. He was among the first to use quantitative theory to study experimental data, using a model of signalling of intentions to explain altruism and spite in games such as ultimatum bargaining and centipede. Most recently, his work on self-control with Fudenberg examines individual decision making and shows how internal conflict and commitment may serve to explain why individuals are vastly more risk averse for small gambles than for large.