Noble Corner – Jean Triole – Contributions by Eric Maskin, Bengt Holmstrom, Paul Joskow, Drew Fundenberg   

Eric Maskin (Harvard University, PhD advisor of Jean Tirole at MIT and 2007 Nobel Prize winner in Economics)

Jean Tirole nearly ruined my teaching career. When I was a new assistant professor at MIT, Jean was one of the students sitting in my game theory class. He was always very polite, but repeatedly asked remarkably penetrating questions. With my inexperience, how was I supposed to know that such questions are unusual in a first-year student? Later on, he and another student, Drew Fudenberg, asked  to meet with me weekly to discuss all the new game theory working papers that had come in (In those pre-internet days, working papers arrived by mail, in case anyone remembers what that is). Can I be blamed for assuming that such initiative in students was normal? Later still, some casual conversations I had with Jean turned into a joint research project that became one of his thesis chapters. Did I have any way of telling that an equal partnership between a student and a professor doesn’t happen very often? Indeed, it was perfectly natural for me to expect all the students who came along afterwards to be just like Jean. That was a serious mistake….

Bengt Holmstrom (MIT)

 First and foremost, I want to extent my personal congratulations to Jean and thank him for thirty wonderful years of friendship and collaboration. Jean is exceptional in so many ways. Let me try to give a glimpse of him by telling how we worked together and why it has been such a rewarding experience for me.  I met Jean for the first time in 1980 when he still was a student at MIT. He came to Northwestern for a conference on information and incentives, which the young faculty at Northwestern had put together. There was plenty of excitement in the air. Game theory, including information and incentive theory, was emerging as a major paradigm that was changing everything. Jean was there to be introduced to the profession as one of MIT’s star students. He told us about his work on bubbles, which sounded interesting, but a bit esoteric. Little did I realize how relevant the work would be in today’s post-crisis world. Jean and I began working together in 1986 on a survey of the theory of the firm. Grossman and Hart had just shaken up the field with their paper on incomplete contracting and we built our discussion largely around that work. It was a fun project with animated discussions and lots of ideas, some of which even made it into the paper. More importantly, it was the start of our long collaboration and deep friendship. Jean is remarkable. Working with him is like playing tennis against a wall – some six feet away. You work hard on a  problem and fax something to him one evening only to wake up the next morning to a ten page reply with comments, corrections, analyses and extensions, all logically presented and neatly written by hand. Just as one thinks there will be at least a couple of days of rest, the catchup work starts over again. Initially, it was frightening. But Jean is not just quick. He is also patient, supportive and appreciative. Unlike the super-competitive days at Northwestern, there has never been any one-upmanship with him.  Our research on financial markets began when I was on sabbatical in Finland in 1991-92, the year the Nordic financial crisis erupted. We started to work on this problem even though it was a largely unknown field to both of us. There was an advantage in not being an expert. Our naïve questions led us down some little tried paths. After many failed efforts we developed a theory of private and public liquidity supply in which the private sector could be short of collateral. It was an idea that many found strange. With so  much wealth in the world, how could there be an aggregate shortage of collateral? The current crisis has put that question empirically to rest. The simple logic of limited pledgeability could address this question before the collateral crisis broke out. This has been one of the many rewards of working with Jean. Our journey together has been enlightening and delightful. I feel truly privileged to have been a co-traveler and companion.

Paul Joskow (Yale University)

I first met Jean when he was a graduate student at MIT and I was teaching the industrial organization (IO) sequence for PhD students with Dick Schmalensee. However, perhaps surprisingly, Jean did not take the IO sequence when he was an MIT PhD student. Indeed, I don’t think that he had ever heard of IO until just before we met. Rather, Drew Fudenberg introduced us after telling Jean about IO, ripe with opportunities for careful  theoretical analysis. I did not really get to know Jean well until after he returned to MIT as a faculty member in 1984. By this time, Jean had begun to work on IO problems and he began to teach IO to MIT PhD students in 1986. We subsequently co-taught the two courses in the IO sequence several times. Jean systematically introduced the framework and material that became part of The Theory of Industrial Organization and later he presented his evolving work  with Jean-Jacques Laffont on incentive regulation which ultimately grew to become A Theory of Incentives in Procurement and Regulation. I learned a lot from Jean during this period of time. Jean gave me and the MIT graduate students the opportunity to see the development and application of theoretical models and analysis to a field that was starving for more comprehensive theoretical foundations. Since those days I have been impressed with Jean’s deep interest in developing theoretical analysis that is relevant to real-world problems. It was also during this period  of time that I got to know Jean-Jacques Laffont and his family and had opportunities to discuss his ideas for creating the IDEI in Toulouse. It was a dark day at MIT when Jean told me that he planned to return to Toulouse. Again I was not surprised, but certainly glad that he was my colleague on the MIT faculty for eight years. Luckily, at my instigation, MIT was pleased to offer Jean a visiting professor position, which has continued up to the present. Jean’s return to France also coincided with my becoming closely associated  first with IDEI and later with the Fondation Jean-Jacques Laffont and the Toulouse School of Economics (I am in the picture of the economists who attended the inauguration of the IDEI that is (or was) in the coffee room in Toulouse). Jean and I began to do research together following the privatization, restructuring, and introduction of wholesale and retail competition in electric power sectors around the world in the 1990s. Our original goal was to develop incentive regulation mechanisms for application to unbundled electric transmission networks. We never actually completed that paper, but the problem remains unsolved so we still have work to do. We  did complete and publish four related papers on electric transmission networks, retail competition, and network reliability problems. Working with Jean was a pleasant educational experience for me. I had never written papers with a theorist before. Jean made me think more rigorously and taught me how we could formulate our ideas into relatively simple models that yielded interesting results with sensible policy implications. And the speed with which Jean turned draft after draft around was amazing (and tiring). Jean taught me how to think more clearly about competition, market power, and regulatory problems that I thought I already knew a lot about. Jean, congratulations, let’s keep up our friendship, and let’s try to finish that unfinished paper.

Drew Fudenberg (MIT)

Jean has a great sense of humor and a ready smile. One of his favorite expressions is “plutot mourir,” which he has applied in jest to diverse activities such as ultimate Frisbee, certain branches of economics, and eating salad before the main course. Our families have kept in touch and have had dinner together regularly throughout the years, and Jean has said “plutot mourir” enough that our sons identify it with him. They have also commented that at our dinners Jean does not talk about work and seems quite relaxed and easy-going: despite Jean’s ability to concentrate for many  hours at a time, he is also able to stop working and enjoy himself. In addition to his love of tennis, he is a loyal son of Champagne, and unlikely to suffer from Keynes’ regret; he has also become a strong booster of Toulousain culture and cuisine. Jean and Nathalie have both always been very generous with their time and possessions. When I married Geneen, he let my inlaws stay in his Boston apartment. When my family came to Toulouse for spring term 1992 he picked us up at the airport and helped us move in.  Later Nathalie and Jean took us to their favorite local stores (such as Xavier) and Nathalie helped us negotiate Toulouse and the French systems. More recently they surprised me with a birthday party, which was an unexpected treat. I met Jean when we started graduate school at MIT. At that time my French was almost as good as his English and I could sometimes help provide translations, though he soon no longer needed  this help. I had planned to take a few waiver exams; Jean planned to take many more, because he wanted to finish the program in two years. He talked me into studying with him for additional waivers in econometrics and macro, and we managed to waive out of most of the first-year program. We went on to work together in many classes, most notably Eric Maskin’s game theory class and a subsequent reading group. Jean had already done some research as part of  his Master’s thesis with Roger Guisnerie, and his experience was a great asset as we shifted from criticizing other papers to writing new ones – both with the intellectual process and with what was then the all-too-physical process of “cut and paste.” Later on Jean suggested we should write a game theory text; as with the additional waiver exams, it wouldn’t have occurred to me to do that. I owe a lot to Jean’s fearlessness and vision.