The Nobel Prize for Economics has been awarded to French Economic Theorist Jean Tiroles, for his research on the regulation of market competition. At the A levels, we learn the theoretical concepts of regulating monopolies and oligopolies, but the real world is much more complicated and complex. While the exact details of Mr Tiroles work is probably too mathematically complex for many of us to understand, his key finding is clear - The right rule for protecting the public interest depends critically on the details of a market. Consider the following example. An earlier rule of thumb had suggested that regulators should always be suspicious of firms that set their price below their marginal cost, because they’re probably just trying to drive competitors out of the market. But many newspapers are given away for free ... in an effort to increase circulation, which in turn increases advertising revenue. Congratulations to Mr Tiroles, and perhaps this is a source of inspiration for anyone looking to pursue an academic career in Economics!
Posted on: Tue, 14 Oct 2014 15:13:45 +0000
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