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Tirole honored for applying game theory

  1. September 20, 2010
  2. By Timothy Inklebarger
  3. PENSIONS & INVESTMENTS
  4. http://www.pionline.com/apps/pbcs.dll/article?AID=/20100920/PRINTSUB/309209988/1022/TOC

Professor Jean Tirole, scientific director of the Industrial Economics Institute at the University of Toulouse (France), was awarded CME Group's Mathematical Sciences Research Institute Prize in Innovative Quantitative Applications.

The prize, which recognizes individuals who contribute original concepts in the use of mathematical, statistical or computational methods in analyzing markets and economics, was awarded Sept. 13 to Mr. Tirole for his use of game theory and information theory in his study of markets, institution regulation and financial crises.

Prior to receiving the award, Mr. Tirole said in an e-mail response to questions that the idea behind his early work was to look at “the informational content of a stock price as a function of market liquidity, and see when this information could be used for compensation and decision-making purposes.”

Mr. Tirole said in the e-mail he has been lucky to conduct his research under the supervision of 2007 Nobel laureate Eric Maskin and other economists.

In addition to following in the footsteps of world-renowned economists, Mr. Tirole said he is excited by the prospect of a broader recognition of the work of “researchers who have fashioned and applied the economics of incentives and game theory.”

“World-leading institutions MSRI and CME will thereby encourage further applications of these techniques to finance,” he wrote in the e-mail.

The prize includes a cash award of $25,000.