Nobel Laureate Prof. Jean Tirole gave a public lecture at the IIFT Delhi Campus

By India Education Diary Bureau Admin On Nov 22, 2022

Prof. Jean Tirole, who received the Nobel Prize in 2014 for his contribution to the development of frameworks for market regulation, said that the digital platforms should not be regulated. Because although the digital platforms are quite like public utilities they are different for two reasons: they are global firms and the technology change is very fast.
He pointed out that digital platforms raises an important issue of contestability and said Multi homing and interoperability are solutions to protect contestability.
Prof. Tirole talked about fairness in the market which is characterized by pure brokers (like Air BnB), ‘coopetition’ (Amazon/Marketplace/Amazon Basics) & Vertical Integration (Apple’s Macintosh).
He was critical of the Chicago School of thought- which says that self referencing is for efficiency reason-high price can be charged for better ecosystem.
In case of digital platforms prices for many services are zero because they make a lot of money from the advertisers and merchants because of the consumers who they provide such services for free and hence high price cannot be charged.
The apps also charge zero price because the consumers who use those apps are sources of revenue for them.
He also talked about defensive mergers, where dominant firms purchase emerging firms. Under the current Antitrust law not much can be done because the authorities most often do not have the data. The burden of proof in case of Tech Giants must lie on the dominant firms instead of the small ones.
The public lecture was organized by Indian Institute of Foreign Trade, New Delhi under the aegis of DST (Department of Science and Technology) Govt. of India, CEFIPRA (Indo-French Centre for the Promotion of Advanced Research) and the French Embassy. The lecture was started after the welcome note of Prof. Manoj Pant (Vice Chancellor, IIFT). After the insightful lecture, Prof. Tirole took questions from many students, academicians, researchers and economist.