In DepthNobel Prizes

Regulating industry's big boys

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Science  17 Oct 2014:
Vol. 346, Issue 6207, pp. 291
DOI: 10.1126/science.346.6207.291

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Summary

Jean Tirole, scientific director at the Industrial Economic Institute at the Toulouse School of Economics in France, has won the 2014 Nobel Prize in economics for his influential analyses of oligopolies, industries dominated by a few large firms. His work has helped governments develop regulation and competition policies, said Tore Ellingsen, chair of the prize committee. Tirole used mathematical modeling from game theory and contract theory to describe how giant firms react and interact under various conditions. He also provided tools to deal with so-called asymmetric information, when public authorities have less information than the firms they are trying to regulate.