“Making sure companies compete fairly is a tricky business. The firms being regulated know far more about their business than those doing the regulating; bureaucrats can easily end up being too heavy-handed or too lax. On October 13th Jean Tirole, a French economist at the Toulouse School of Economics, was awarded the Nobel prize in economics for his work on this conundrum—“industrial organisation”, in the jargon.
Mr Tirole began publishing in the 1980s, when many governments were busy privatising big parts of their economies, from telecommunications to transport. It quickly became clear that the new, liberalised industries might not form perfectly competitive markets. Along with Jean-Jacques Laffont, a frequent partner who might have shared the prize had he not died in 2004, Mr Tirole developed a novel way of thinking about the difficulties regulators face managing such markets.”
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