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How Frenchman’s Nobel Research Could Aid Consumers

How Frenchman’s Nobel Research Could Aid ConsumersHow Frenchman’s Nobel Research Could Aid Consumers

US consumers might be paying less than they are for cable and Internet access if regulators had followed the guidance of Jean Tirole in promoting industry competition, AP reported.

Experts claim the same in assessing the work of Tirole, a 61-year-old Frenchmen who won the Nobel prize in economics Monday for showing how to encourage better products and competitive prices in industries dominated by a few companies.

“He has given us an instruction manual for what tool to use in what market,” said Torsten Persson of the prize committee. “Politicians would be stupid not to take his policy advice.”

Joshua Gans, management professor at the University of Toronto, says US regulators didn’t follow Tirole’s advice to require cable and phone companies to sell competitors access to “the last mile” of cable connecting homes to telecommunications networks. Instead, giants such as Comcast and Time Warner now control the last mile.

Tirole, a professor at the Toulouse School of Economics in France who earned a doctorate from Massachusetts Institute of Technology, is the third Frenchman to win the $1.1 million Nobel Memorial Prize in Economic Sciences, which has been dominated of late by US economists. This is the first year since 1999 that an American has not been among the winners.

Tirole did much of his work with his Toulouse School colleague Jean-Jacques Laffont, who died in 2004. Had he lived, Laffont “would have certainly shared” the prize with Tirole, says David Warsh, who follows academic economists on his Economic Principals blog.

 

Financialtribune.com