[ti:Jean Tirole Wins Nobel Economics Prize] [ar:Mario Ritter] [al:Economics Report] [by:www.51voa.com] [00:00.00]From VOA Learning English, this is the Economics Report. [00:06.58]Economists have studied how markets work for a long time. [00:11.90]Generally, they work well. [00:14.30]But markets do not always perform as expected. [00:19.09]Jean Tirole of France won the Nobel Prize in Economics [00:24.71]for studying why markets are imperfect, [00:27.95]or inefficient, [00:29.54]and what governments can do to regulate them. [00:32.87]The Royal Swedish Academy of Sciences [00:37.20]announced the $1.1 million prize in Stockholm on Monday. [00:43.44]It called Mr. Tirole [00:46.74]"one of the most influential economists of our time." [00:50.72]The organization said he had done important research [00:55.55]in a number of areas. [00:57.34]But, it said, "most of all [01:00.27]he has clarified how to understand [01:03.16]and regulate industries [01:04.90]with only a few powerful firms." [01:07.99]A small number of companies [01:11.27]that control an industry is called an oligopoly. [01:15.76]For about 30 years, [01:18.76]Mr. Tirole has researched periods [01:22.24]when markets failed, [01:23.83]that is, when they did not provide good results [01:27.42]in price and competition. [01:29.60]He looked at how a small number of large companies, [01:34.60]or even a single company, [01:36.64]can strongly influence industries. [01:39.63]Banking and telecommunications [01:43.32]were among the industries he studied. [01:45.81]The Nobel committee said that unregulated markets [01:50.79]often produce socially undesirable results. [01:54.57]They can result in higher prices or companies [01:59.05]that use their market position to block others. [02:02.28]The committee said it chose Mr. Tirole [02:06.06]because he thought about how best to regulate markets. [02:10.44]For example, Tore Ellingsen says [02:14.43]Mr. Tirole showed the need to develop better rules [02:18.74]for the banking industry. [02:20.29]This gained urgency after the world financial crisis [02:25.19]of 2008-2009. [02:28.52]Mr. Ellingsen is Chairman of the committee [02:32.87]that awards the economics prize. [02:35.41]"Jean Tirole is really trying to understand [02:38.65]what is it that drives the owners of banks. [02:44.08]What are their objectives, [02:45.23]and what are they driven to do [02:47.72]if regulation is very lax? [02:51.26]And he then comes to the conclusion [02:53.41]that what they are driven to do [02:54.65]is to take risks that are far too large [02:57.74]from the point of view of the public interest. [03:00.47]So there needs to be tougher regulatory regime, [03:04.90]in particular for investment banks." [03:07.29]Mr. Tirole works at the Toulouse School [03:11.28]of Economics in Toulouse, France. [03:13.67]He is 61 years old. [03:16.47]The economics prize is called the Bank of Sweden Prize [03:21.85]in Economic Sciences in Memory of Alfred Nobel. [03:26.18]Alfred Nobel did not establish the prize. [03:30.77]It was first presented in 1969. [03:34.75]The Nobel economics prize will be presented [03:39.13]at a ceremony in Stockholm, Sweden, on December 10th. [03:43.98]And that's the VOA Learning English Economics Report. [03:48.85]You can find more of our programs at 51voa.com. [03:55.92]I'm Mario Ritter.