French Economist Jean Tirole Wins Nobel Prize For Economics

The Nobel committee has honoured French economist Jean Tirole with this year’s Nobel prize in economics for clarifying “how to understand and regulate industries with a few powerful firms.”

Image Credit: C Lebedinsky/AP

In its citation, the academy said, Tirole showed theoretically that such rules may work well in certain conditions, but do more harm than good in others. Price caps can provide dominant firms with strong motives to reduce costs – a good thing for society – but may also permit excessive profits – a bad thing for society. Cooperation on price setting within a market is usually harmful, but cooperation regarding patent pools can benefit everyone,” adding, “From the mid-1980s and onwards, Jean Tirole has breathed new life into research on such market failures.”

“In a series of articles and books, JeanTirole has presented a general framework for designing such policies and applied it to a number of industries, ranging from telecommunications to banking. Drawing on these new insights, governments can better encourage powerful firms to become more productive and, at the same time, prevent them from harming competitors and customers,” the committee said.

The 61-year-old Tirole is Professor at the Toulouse School of Economics in France.

(With input from Associated Press)

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