Jean Tirole, the French economist who won this year’s Nobel economics prize, has so many ideas that it takes a 52-page scientific paper just to list them, with the authors apologizing that “it is hard to do justice to his immense body of work in a few introductory paragraphs.” One of his contributions that’s relatively easy to explain, however, gives a taste of what he has done—and continues to do, since at age 61 he remains in the prime of his fertile career.
The government worries mainly about “horizontal” mergers in which one company buys another that does the same thing. But there’s also risk in vertical combinations. A monopolist in one part of the production chain—say, a computer operating system—might be able to extend its market power to neighboring links on the chain.
via This Nobel Economist Analyzes Competition – Businessweek.
