Jean Tirole Essay Example | Topics and Well Written Essays - 1000 words

Jean Tirole - Essay Example Most of the economists frequently regard fiercely competitive markets as the public interest. When the producers in the said markets fight to earn a profit or gains, they are guided, as if by an invisible hand, in delivering high quality at the lowest cost possible. But most the industries are not competitive, and due to the lack of competition, there is the need for intervention the public’s interest. Competition policies and theories of regulation are aimed at providing useful scientific guidance in such interventions. Stigler George was awarded a Prize in Economic Sciences in 1982 â€Å"for his seminal studies in functioning of markets, industrial structures, and the causes and effects of public regulations†; however the study did not cater for the rapidly developing, revolutionary, industrial organization (IO) field. Jean Tirole is the best among the contributors to the analytical revolution; he has enhanced the understanding of the IO in general, and particularly the optimal policy interventions. The theoretical advancements, by Tirole, are in line with great public-policy interest, for example, in the 1980s and 1990s most of the countries pursued pro-competitive liberalization and regulatory reforms. The European Union (EU) came up with a single market; new issues sprung and could not be fruitfully analyzed with the existing theories, Stigler George, and others; the EU analysis required synchronization of the oligopoly theory contract theory, the principal-agent, with combination of industrial economics combined with public economics. Jean Tirole’s expertise covered all the above fields, hence was ideally positioned at making a lasting contribution (Tirole & Lerner, 2013). Tirole created a synchronized framework used in regulation and IO theory, based on a thorough analysis of information and strategic behavior economics. He consistently extracted his results from the fundamental