Today i hear the news that Jean Tirole got the Nobel prize for economics, i am very much happy as someone outside USA has secured it for long time.
After almost 15 years, someone outside the USA has been conferred the Nobel Prize for economics. His research was very simple but full of deep analysis. He bravely understood the market power and regulation. He understood the "essential nature of imperfect competition and contracting under asymmetric information." Yes mostly economists understands and research assuming perfect competition but in reality it is not. For me competition is created by wealth incorporating bad practices of incurring loss either for some period or upon some goods.
These days there is trend to incur loss earlier for capturing the market and then enjoy the monopoly once you got the brand. Marketing and business is very much different from politics. In business, the older you are, the credibility gets enhanced.
Mr. Tirole has rightly taught the practical significance of economic theory and it shuts the mouth of those who says economists are theorists only and have nothing to do with the practice. He points out that in some industries average costs are minimized when production is concentrated within a single firm.
He also argues that sustainability in an industry which requires rapid innovation is little bit tough as the firm innovates for some time and then new player comes in with super innovation. Whether you like it or not but there is a live example of facebook and orkut which substantiate his argument. Orkut fails due to want of innovation and suddenly Facebook innovates and get the dominance over the market.
I think we should take rest and good night.
After almost 15 years, someone outside the USA has been conferred the Nobel Prize for economics. His research was very simple but full of deep analysis. He bravely understood the market power and regulation. He understood the "essential nature of imperfect competition and contracting under asymmetric information." Yes mostly economists understands and research assuming perfect competition but in reality it is not. For me competition is created by wealth incorporating bad practices of incurring loss either for some period or upon some goods.
These days there is trend to incur loss earlier for capturing the market and then enjoy the monopoly once you got the brand. Marketing and business is very much different from politics. In business, the older you are, the credibility gets enhanced.
Mr. Tirole has rightly taught the practical significance of economic theory and it shuts the mouth of those who says economists are theorists only and have nothing to do with the practice. He points out that in some industries average costs are minimized when production is concentrated within a single firm.
He also argues that sustainability in an industry which requires rapid innovation is little bit tough as the firm innovates for some time and then new player comes in with super innovation. Whether you like it or not but there is a live example of facebook and orkut which substantiate his argument. Orkut fails due to want of innovation and suddenly Facebook innovates and get the dominance over the market.
I think we should take rest and good night.
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