Jean Tirole wins 2014 Nobel Prize in economics

Tirole’s book The Theory of Corporate Finance analyses the impact of regulation on corporations in the modern economy

French Nobel prize winner Jean Tirole (AFP)

French economist Jean Tirole is the winner of this years economics Nobel Prize for his theory on market power and regulation.

The Toulouse University director has won 8 million Swedish crown (£700,000) for his work on the impact of regulation on industrial organisations.

The prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968 making this year the 46 time it has been awarded.

At the award ceremony in Stockholm the Royal Swedish Academy of Sciences 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."

Tirole’s book The Theory of Corporate Finance analyses and puts forward a theory on how to govern giant corporations in the modern era. In one paper he questions the established economic idea that individuals always respond to incentives.