Another Nobel Prize, another incorrect prediction. The Nobel Prize in Economics–to give it its full title, “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”–was this morning awarded to Jean Tirole for his work regulating big business. Hailed by the Royal Swedish Academy of Sciences as “one of the most influential economists of our time,” the economist “has breathed new life into research on market failures. His analysis of firms with market power provides a unified theory with a strong bearing on central policy questions: how should the government deal with mergers or cartels, and how should it regulate monopolies?”
Tirole broke the news of his win to his wife and then to his mother. “She is 90 years old and I first ask her to sit before I told her of the news. So, but yes, she was, my mother used to be a teacher, French and Latin and Greek teacher. You know, knowledge is very important to her, very important. And of course, for my wife and my children also. I see one of my daughters is on Skype with me from London and in fact it is actually quite moving for the whole family of course.” The Vice-President of the European Commission, Joaquin Almunia, says that Tirole is owed a large debt by those who want to ensure fairness in business. “For competition enforcers, his work has been of major importance. He is one of the sharpest economic theorists having contributed to our understanding of market power and how regulation may effectively curb it. We owe Jean Tirole so much. His work has been central to the economic analysis underpinning many of our instruments in competition policy and beyond. This includes work on vertical agreements, mergers, competition in network industries and so much more. I finally also wish to pay tribute to Jean Tirole’s renowned humility.” The Nobel Prizes in Science and Literature will be awarded in Stockholm on December 10th. The Peace Prize will be awarded in Oslo.