Jean Tirole wins Nobel Prize for Economics -2014
The Nobel Prize for Economics was awarded to Jean Tirole “for his analysis of market power and regulation”. He will be awarded prize money of 8 mn Swedish krona.
Jean Tirole is the second Frenchman to have been awarded a Nobel Prize this year. Tirole has been very vocal about the need for greater regulation of banks, and has been in the news for his views ever since the financial crisis of 2008.
Work of Tirole
Tirole’s area of study has been markets which are dominated by a few large and powerful firms or which have a single monopoly. When left unregulated by the government, these firms tend to distort the markets and have generally adverse consequences. Since the mid 1980s, Tirole has been researching such market failures. He analysed these firms in order to determine the best way to regulate them effectively. Governments of most nations had a tendency to place the same set of regulations on the firms in different sectors/industries. Tirole’s work suggested that such a method would be ineffectual, and that there need to be different regulations and restrictions on firms in different sectors like banking, telecommunications etc. His work has helped governments develop a better framework to protect the rights of both competing firms, small size firms and consumers.
Jean was born on 9 August 1953, in France. He did his doctorate from MIT in Cambridge, Massachusetts. He is currently with the Toulouse University in France where he is the Scientific Director at Institut d’Économie Industrielle in the Toulouse School of Economics.
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences is officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It is not one of the original Nobel Prizes established by Alfred Nobel’s will in 1895. The Economics Prize was established only in 1968, and is funded by Sweden’s central bank, Sveriges Riksbank. The bank created an endowment for the Prize on its 300th anniversary.
However, the Economics prize follows the same rules governing the original Nobel Prizes and is awarded at the same ceremony. Also, in consonance with Nobel’s will, the Economics Prize is also given to persons who have conferred the greatest benefit on mankind. The selection is done by the Royal Swedish Academy of Sciences, who pick the Nobel laureates in chemistry and physics.