A Frenchman has won the Nobel Prize for economics for his work on how governments can tame powerful companies.
Jean Tirole, who has studied regulation and oligopolies since the 1980s, was awarded the prize in Stockholm yesterday for his theories on how regulators can control competition issues and modern corporate giants. His work can help governments understand the new dynamics of once-public monopolies, from railways to media.
The Royal Swedish Academy of Sciences, which awards the prizes, said: “Jean Tirole is one of the most influential economists of our time. Most of all he has clarified how to understand and regulate industries with a few powerful firms.”
Mr Tirole, the first Frenchman to win in more than 25 years, is a Toulouse University director and helped found the Toulouse School of Economics. His theories centre on how different regulation should be used for different industries. He suggests that regulators should treat each sector differently and the controls on industries as diverse as internet companies to banks should be tailor-made, while also highlighting the importance of a general framework for understanding regulation across industries.
Mr Tirole, aged 61, who has a PhD in economics from Massachusetts Institute of Technology, previously worked on the effects of credit bubbles and has said the recent financial crisis was largely the result of insufficient regulatory institutions.
The Nobelprize.org website describes how his work relates to decisions often faced by governments on which activities should be “conducted as public services and which should be left to private firms”. His work is also seen as particularly relevant when applied to the media sector and those companies that operate in two-sided markets such as Google, with customers and suppliers.
Mr Tirole wins Skr8m (£700,000). The Nobel prize for economics was not created with the original awards in 1895 but was founded in 1968 by Sweden’s central bank – Svierges Riksbank – to celebrate its 300th anniversary.Reuse content