{"id":1601,"date":"2014-10-13T04:27:11","date_gmt":"2014-10-13T11:27:11","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1601"},"modified":"2014-10-13T15:50:02","modified_gmt":"2014-10-13T22:50:02","slug":"jean-tirole-theory-and-application","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/10\/jean-tirole-theory-and-application\/","title":{"rendered":"Jean Tirole, theory and application"},"content":{"rendered":"

\"not<\/a>Jean Tirole has won the 2014 Nobel Prize in Economics<\/a>. Because he works in microeconomic theory that is not easy going for those without advanced training in mathematics or economics, his is not a well-known name outside the discipline (even econ undergrad students may not have heard of him, though all graduate students will have).<\/p>\n

But that doesn’t make his work any less important. His work in economic theory on incentives, principal-agent problems, and ‘industrial organization’ (the term that in practice means the analysis of sectors of the economy that aren’t well explained by simple models of supply-and-demand) yields great insights, and provides the foundations for those working on very ‘real world’ economic problems.<\/p>\n

His brilliant text \u00a0The Theory of Industrial Organization<\/em><\/a> gave me insights on pricing that make their way into the significantly lower-tech book of mine on Strategic Pricing in the Arts<\/em><\/a>, especially his elegant way of structuring the problem of ‘non-linear pricing’ (e.g. price differentials for different quality of product (like different quality of seating in a performance hall) or different quantity of product (like discounts for subscribers over single-ticket purchases)), and showing the common structure to solving problems that on the surface might appear to be quite different. Solutions to ‘practical’ problems in pricing require some sort of theoretical model that provides a framework for moving forward systematically. The economy is complex, and so models are often necessarily complex, but mathematical complexity does not mean irrelevancy; good modeling is about being clear on assumptions being made, and the process of moving from problem to solution.<\/p>\n

A most worthy winner of the prize.<\/p>\n

UPDATE: Diane Coyle<\/a> expresses what I wanted to say, with greater elegance.\u00a0Also see\u00a0Joshua Gans<\/a>.<\/p>\n

MORE UPDATE: The invaluable Mark Thoma<\/a> gathers the reactions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Jean Tirole has won the 2014 Nobel Prize in Economics. Because he works in microeconomic theory that is not easy going for those without advanced training in mathematics or economics, his is not a well-known name outside the discipline (even econ undergrad students may not have heard of him, though all graduate students will have). […]<\/p>\n","protected":false},"author":3,"featured_media":1602,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1601","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/10\/tirole.jpeg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-pP","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1425,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/07\/strategic-pricing-for-the-arts\/","url_meta":{"origin":1601,"position":0},"title":"Strategic pricing for the arts","author":"Michael Rushton","date":"July 21, 2014","format":false,"excerpt":"I'm pleased to say my book on pricing in the arts has been released - Amazon link here, and Routledge link (including for ordering e-inspection copies) here. What's it all about? As I do \u00a0on this blog, I have tried to give arts managers, and students of arts management, a\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"for what it's worth","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/07\/my-book.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1274,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/05\/gary-becker-the-economic-way-of-thinking-and-the-arts\/","url_meta":{"origin":1601,"position":1},"title":"Gary Becker, the economic way of thinking, and the arts (updated)","author":"Michael Rushton","date":"May 4, 2014","format":false,"excerpt":"University of Chicago economist, and Nobel Laureate, Gary Becker, has died at the age of 83. A brief summary of his work is here, and a more complete picture given by his Nobel address, here. He is one of the most influential economists of the contemporary era. His innovations stemmed\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"rational change in what we want","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/05\/Gary-Becker.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":2729,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/04\/book-diary-april-27-arts-funding-and-welfarism-merit-goods-who-cares-if-you-listen-and-a-first-look-at-perfectionism\/","url_meta":{"origin":1601,"position":2},"title":"Book Diary – April 27 – Arts Funding and Welfarism, Merit Goods, Who Cares if you Listen?, and a first look at Perfectionism…","author":"Michael Rushton","date":"April 27, 2022","format":false,"excerpt":"'I think there can't be too many pictures and statues and works of art,' Hyacinth broke out. 'The more the better, whether people are hungry or not.' Henry James, The Princess Casamassima This week (and the next few weeks) I have been wrestling with the topic of perfectionism in moral\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/04\/James.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":741,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/what-do-we-talk-about-when-we-talk-about-the-economic-impact-of-the-arts\/","url_meta":{"origin":1601,"position":3},"title":"What do we talk about when we talk about the economic impact of the arts?","author":"Michael Rushton","date":"April 30, 2013","format":false,"excerpt":"In the news from Britain in the past week has been a speech by Culture Minister Maria Miller on the arts and the economy in the UK - the full text is here. Commentary has ranged from the concern about putting too much emphasis on the economic, to how we\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"multiplier","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/yorkshire-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2738,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/05\/book-diary-may-9-how-did-i-get-here-some-biography-econ-101ism\/","url_meta":{"origin":1601,"position":4},"title":"Book Diary – May 9 – How did I get here? Some biography, Econ 101ism…","author":"Michael Rushton","date":"May 9, 2022","format":false,"excerpt":"I am writing a book about The Moral Foundations of Public Funding for the Arts. My first diary entries are here and here. How did I come to be writing on this topic? Let's go way back... In high school I was one of the band room kids: French horn\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"just a singer in a rock and roll band","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/05\/Elygra-rotated.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1873,"url":"https:\/\/www.artsjournal.com\/worth\/2015\/03\/dynamic-pricing-and-market-segmentation-at-the-theatre-and-the-hospital\/","url_meta":{"origin":1601,"position":5},"title":"Dynamic pricing and market segmentation at the theatre (and the hospital)","author":"Michael Rushton","date":"March 23, 2015","format":false,"excerpt":"This post is about theatre pricing, from a unlikely source. Today's New York Times has a piece by Austin Frakt on hospital pricing, and whether and how changes in funding of patients through public sector programs might change hospital charges to privately insured patients. Mid-way through, the article looks for\u2026","rel":"","context":"With 2 comments","block_context":{"text":"With 2 comments","link":"https:\/\/www.artsjournal.com\/worth\/2015\/03\/dynamic-pricing-and-market-segmentation-at-the-theatre-and-the-hospital\/#comments"},"img":{"alt_text":"how much for a bed with a view?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/03\/old-hospital.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1601","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=1601"}],"version-history":[{"count":5,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1601\/revisions"}],"predecessor-version":[{"id":1612,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1601\/revisions\/1612"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/1602"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=1601"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=1601"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=1601"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}