Jean Tirole is not the pop star of the economy. It represents a bulky tray and complicated issues that are important but: It’s about power.From Hans von der Hagen
As Dean Martin Peitz had yet proved by the University of Mannheim some foresight when he formulated almost exactly three years ago: “I would not be surprised, this internationally renowned economists in the suggestion list for the retrieve the next Nobel Prize in Economics. “
One of the time honored with an honorary doctorate was Jean Tirole. Now this year he actually receives the Nobel Prize for his “analysis of the power of markets and regulation”. A special feature is the same for several reasons: First, Tirole is from France, so from Europe – were so far from the 74 previous winners of nearly two-thirds of the United States and only 23 people from the old world. Moreover, there was in the past few years hardly individual award winners – most recently in 2008 Paul Krugman. In most cases, the prize was shared.
The 61-year-old Tirole one of those economists who have long been considered for a Nobel Prize in consideration, although his area of expertise, the industrial economics, is bulky. It’s mostly about competition – for markets and the behavior of firms in these markets. Questions are concretely important such as: When should mergers be allowed? When threatened the power of individual companies to be too big? Or when are contracts between companies so detrimental to consumers that they should be banned?
The power of corporations tame
In addition, Tirole concerned with the regulation of enterprises, so the question as companies with much power – about former state enterprises, monopolies or the major energy suppliers – can be tamed
Is it a coincidence that Tirole just now, when so much is said about the regulation of banks and corporations, the. Nobel Prize receives?
“Yes,” says Volker cam, which is itself industrial economist at the University of Mannheim and Tirole and whose work knows well. Already have Tirole 1988 published “The Theory of Industrial Organization”, a book that set the standard to this day. The regulation was an important issue in the 1980s, because at that time many state monopolies to private monopolies – ie to companies that had no competitors in their markets. The fear was then as now great that these companies could exploit the concomitant power to the detriment of consumers or other companies.
Tirole has moved a lot in the industrial economy, he led especially important game-theoretic methods in the tray one. There is hardly anyone who has published so wide at the highest level, says cam. So it was not easy, focused to describe his work. In one of Tyrol’s articles, the cam deems important, it is, for example, the question of what could be the effects of a so-called vertical merger. From a vertical merger is spoken, as when a car manufacturer buys a supplier.
This is an area in which courts still like to draw inspiration from the more neo-liberal ideas of the Chicago School. Which in turn implies: Vertical mergers have a negative impact for consumers, because in this way market power could not be extended – so different than a merger of two companies that manufacture similar products. Tirole, however came to the conclusion that vertical mergers might well entail disadvantages for the consumer. Insofar Tirole stand for the so-called post-Chicago School, says cam.
theory close to the consumer
Sounds theoretically? Perhaps. But how much corporations struggled to get through the back door more power, showed only a few months ago the telecom. They wanted to impose a limit on the data volume in the Internet-Flatrate. The trick: When downloading the amount of data for its own products such as Internet TV should not be counted. Insofar as the supplier of similar products threatened to be disadvantaged by this provision. Problems like this are the ones with that are addressed in Tirole.
The new Nobel laureate professor at the University of Toulouse, where it has built up one of the leading departments of Industrial Economics. Tirole has decisively contributed to his profound work that easily, at least in this field Toulouse with the best business schools in the world can measure. Now of course even more so.
criticism of the Price
is the Nobel Prize in economics, unlike the other Nobel Prizes, awarded by the Swedish Riksbank. Formally’s his name only: “Prize of the Swedish realm bank for economics in memory of Alfred Nobel”. Although for him apply the same selection criteria as for the other Nobel Prizes, nevertheless its very existence is always criticized – especially because Alfred Nobel once known in a letter to his brother Ludvig: “There is not a single reason that I who has no training in running a business, and I hate it with all my heart, should be tormented with such things, I speak just as well as the man in the moon. “
Friedrich August von Hayek, a winner of 1974, said at the ceremony that the price an individual bring as much authority as she could no one have in the economy. But it was mainly a reminder to the media and politicians: The Nobel Prize in Economics does not prove that the honored omnicompetent in all social questions was
Tirole itself is probably just barely hold for omnicompetent.. Cam says the Frenchman was a “very humble, very friendly and very helpful person.” Maybe this also helps the reputation of the Nobel Prize in Economics.