Jean-Jacques Laffont

Jean-Jacques Laffont was Professor of Economics at the Université des Sciences Sociales de Toulouse and the Institut Universitaire de France and Director of the Institut d'Economie Industrielle.

  • Cost Proxy Models and Telecommunications Policy

    Cost Proxy Models and Telecommunications Policy

    A New Empirical Approach to Regulation

    Farid Gasmi, D. Mark Kennet, Jean-Jacques Laffont, and William W. Sharkey

    An empirical approach to understanding telecommunications regulation based on the use of a sophisticated engineering cost proxy model.

    The telecommunications industry defies easy characterization. The long-distance sector is highly competitive and the local exchange sector much less so, while digital transmission and switching have blurred the distinction between traditional voice communication and the transmission of video and data messages. Regulation of this industry has generally been considered necessary because it has aspects of a natural monopoly.

    This book takes an empirical approach to natural monopoly and the need for regulation of telecommunications. The centerpiece of the analysis is a sophisticated engineering cost proxy model, the local exchange cost optimization model (LECOM). The book, which is largely methodological, shows that a combination of LECOM, econometrics, and simulations can aid policy discussion of such contentious issues as incentive regulation, natural monopolies, estimating the cost of interconnection among networks, and the obligation of universal service. The book presents a theoretical framework to explain the incentives of firms and the power of regulation and then uses LECOM to test the theoretical implications. The work is unusual in that it applies the foundations of regulation theory to a model of an industry rather than applying econometric theory to historical cost data. The book includes a CD-ROM containing the data set the authors used to analyze their model.

    • Hardcover $10.75 £8.99
  • Competition in Telecommunications

    Competition in Telecommunications

    Jean-Jacques Laffont and Jean Tirole

    Theoretical models based on the assumption that telecommunications is a natural monopoly no longer reflect reality. As a result, policymakers often lack the guidance of economic theorists. Competition in Telecommunications is written in a style accessible to managers, consultants, government officials, and others. Jean-Jacques Laffont and Jean Tirole analyze regulatory reform and the emergence of competition in network industries using the state-of-the-art theoretical tools of industrial organization, political economy, and the economics of incentives. The book opens with background information for the reader who is unfamiliar with current issues in the telecommunications industry. The following sections focus on four central aspects of the recent deregulatory movement: the introduction of incentive regulation; one-way access (access given by a local network to the providers of complementary segments, such as long-distance or information services); the special nature of competition in an industry requiring two-way access (whereby competing networks depend on the mutual termination of calls); and universal service, in particular the two leading contenders for the competitively neutral provision of universal service: the use of engineering models to compute subsidies and the design of universal service auctions. The book concludes with a discussion of the Internet and regulatory institutions.

    Copublished with the Center for Economic Studies and the Ifo Institute.

    • Hardcover $30.00 £25.00
    • Paperback $50.00 £40.00
  • A Theory of Incentives in Procurement and Regulation

    A Theory of Incentives in Procurement and Regulation

    Jean-Jacques Laffont and Jean Tirole

    Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities.

    More then just a textbook, A Theory of Incentives in Procurement and Regulation will guide economists' research on regulation for years to come. It makes a difficult and large literature of the new regulatory economics accessible to the average graduate student, while offering insights into the theoretical ideas and stratagems not available elsewhere. Based on their pathbreaking work in the application of principal-agent theory to questions of regulation, Laffont and Tirole develop a synthetic approach, with a particular, though not exclusive, focus on the regulation of natural monopolies such as military contractors, utility companies, and transportation authorities.

    The book's clear and logical organization begins with an introduction that summarizes regulatory practices, recounts the history of thought that led to the emergence of the new regulatory economics, sets up the basic structure of the model, and previews the economic questions tackled in the next seventeen chapters. The structure of the model developed in the introductory chapter remains the same throughout subsequent chapters, ensuring both stability and consistency. The concluding chapter discusses important areas for future work in regulatory economics. Each chapter opens with a discussion of the economic issues, an informal description of the applicable model, and an overview of the results and intuition. It then develops the formal analysis, including sufficient explanations for those with little training in information economics or game theory. Bibliographic notes provide a historical perspective of developments in the area and a description of complementary research. Detailed proofs are given of all major conclusions, making the book valuable as a source of modern research techniques. There is a large set of review problems at the end of the book.

    • Hardcover $95.00 £78.00
  • Edmond Malinvaud, Volume 1

    Essays in His Honor

    Paul Champsaur, Michel Deleau, Jean_Michel Grandmont, Roger Guesnerie, Claude Henry, Jean-Jacques Laffont, Guy Laroque, Jacques Mairesse, Alain Monfort, and Yves Younes

    Available for the first time in translation the thirty-four essays collected in these three volumes provide English-speaking readers with an easily accessible and substantial library of current French economic thought, conveying the vitality of economic theory in France today.

    Edmond Malinvaud is among the world's most highly respected economists. Available for the first time in translation the thirty-four essays collected in these three volumes provide English-speaking readers with an easily accessible and substantial library of current French economic thought, conveying the vitality of economic theory in France today. The essays reflect Malinvaud's own broad contributions to the field and range from theoretical analysis to applied project evaluation, from the formalization of basic concepts to analyses directed toward policy planning and assessment, and from examples of pure statistical methodology to empirical studies.Included are a number of valuable studies on unemployment, one of the basic themes of Malinvaud's work, that report significant advances in the theory of disequilibrium and related approaches. There are essays that provide excellent examples of recent advances in market analysis, that cover important advances in difficult areas of econometrics such as the application of test theory to complex nonlinear cases and the fundamentals of estimation under more realistic hypotheses, and essays that make significant contributions to statistical methods in econometrics, presenting "clean" statistical procedures which contain the elements of solutions to such practical problems as data adjustment.

    • Hardcover $90.00
  • The Economics of Uncertainty and Information

    The Economics of Uncertainty and Information

    Jean-Jacques Laffont

    The Economics of Uncertainty and Information may be used in conjunction with Loffont's Fundamentals of Economics in an advanced course in microeconomics. Both texts provide a thorough account of modern thinking on the subject and a wealth of carefully chosen examples and problems. The first four chapters of The Economics of Uncertainty and Information summarize the essential tools of the analysis of uncertainty and information: the theory of individual behavior under uncertainty, the measures of risk aversion and the measures of risk, and the notions of certainty equivalence and information structure. Subsequent chapters introduce the theory of contingent markets, model systems of incomplete markets and define the concept of a perfect foresight equilibrium, cover two fundamental institutions for sharing risk - the stock market and insurance, show how the transmission of information by prices renders information structures endogenous, and study personalized exchange with asymmetric information. Each chapter concludes with a list of suggested readings and with auxiliary sections which go into more detail about certain aspects of the subject. The book concludes with review problems and exercises.

    • Hardcover $60.00 £50.00
  • Fundamentals of Public Economics

    Fundamentals of Public Economics

    Jean-Jacques Laffont

    This text by one of Europe's leading economists covers a wide variety of public economics issues with great clarity and precision, illustrating them with a wealth of carefully-chosen examples and problems.

    Starting from theories of general equilibrium analysis, Laffont considers issues of market failure, collective decisionmaking, and distributional equity. He analyzes the important informational and motivational problems involved in planning solutions for market failures, and provides a rigorous justification for the theoretical foundations of public economics.

    Topics include the theories of externalities, public goods, collective choice, consumer surplus, cost-benefit analysis and/or theory of the second best, incomplete markets, and nonconvexities. For each Laffont begins with the classical foundations, moves on to consider the topic within a simple model of the economy, and concludes by integrating results from recent journal articles into this simple framework. In this way students are led to understand the classical tradition in the context of modern general equilibrium theory.

    The book concludes with eight problems with solutions, each interesting and rich enough to be considered a case study, and nine exercises without solutions; together they provide an excellent review of material covered in the text. The basic approach in each problem is to set up a general equilibrium model, discover the market failure by calculating the unfettered equilibrium, and develop an explicit planning solution.

    Jean-Jacques Laffont is Professor of Economics at the University of Social Sciences at Toulouse. Fundamentals of Economics may be used in either an advanced graduate-level course in public economics or in conjunction with a second volume forthcoming by the same author in a course in advanced microeconomics.

    • Hardcover $11.75 £9.99
    • Paperback $25.00 £20.00