One story that can be told about today’s announcement is the Royal Swedish Academy of Sciences’ own announcement: that French economist Jean Tirole has been awarded the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2014 because he “has clarified how to understand and regulate industries with a few powerful firms.”
The other story is: Tirole has shown how much the real world of capitalism—industries that are dominated by a few firms that have extensive market power, which can charge prices much higher than costs and block the entry of other firms—differs from the fantasy taught in countless introductory courses in economics: a world of perfect competition, which has no negative effects on society and which therefore doesn’t need to be regulated.Occasional Links & Commentary
Nobel economics
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame
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