USC College economics professor Jean-Jacques Laffont died May 1, at his home in Colomiers, France, after a lengthy illness. He was 57.
Laffont began his professional career as a theorist in incentives, a field that asks what makes people act in a particular way in an economic or business situation. The answers help others design institutions that can ensure good incentives for producers and consumers.
In collaboration with Jean Tirole, Laffont developed an application of incentive theory to regulation that established him as a preeminent theorist of regulation.
The theory is now one of the principal tools in economics with important applications for just about every domain, including the allocation of public goods, the design of contracts, auctions and procurements, the regulation of industries, the internal hierarchies of firms, the analysis of network competition and their counterparts in developing countries.
On May 5, the newspaper Le Monde remembered Laffont as “one of the best economists of his generation,” adding, “Through his research, which ranked with those of Nobel Prize-winning caliber and his tireless work in developing institutions, he is one of the economists that has done the most for the study of French economics.”
Throughout his life, Laffont provided guidance to international organizations such as World Bank and some of the largest European and American private and state-owned firms. He worked with World Bank to develop a theory of regulation for developing countries, and his papers on pricing in the American telecommunications industry were often quoted by the Federal Communications Commission.
Laffont consulted for corporations in the telecommunications industry, where he was an authority on the pricing of interconnections – a vital question in liberalization or deregulation. His book “Competition in Telecommunications” (MIT Press), translated into Chinese, was an industry handbook.
Laffont joined USC in September 2001 as the first holder of the John Elliott Chair in Economics. He was recently named a USC Distinguished Professor, an award selectively given to those whose accomplishments have brought special renown to USC.
At USC, Laffont was the force behind strengthening the economics department’s research efforts in areas of theoretical and applied economics. He introduced advanced courses in the rapidly evolving fields of industrial organization and contract theory. As a leader in these fields, he was instrumental in attracting numerous senior faculty to USC College’s economics department.
“During the time that I was privileged to know and work with Jean-Jacques, I was impressed by his spirit, brilliance and high standards,” said Joseph Aoun, dean of the college. “The awards and honors bestowed on him were many during his brief life. He was most deserving of every recognition.”
“J.J. Laffont has had a profound impact on our department,” said Robert Dekle, chair of the college’s economics department. “Although he is a great scholar, I remember him as a man of deep judgment, humor and humanity.”
Laffont came to USC from the University of Toulouse, where he built a leading research center from a virtually unknown department. Today the center is at the forefront of economic research.
He was the author of more than 200 papers and 14 books including:
“Competition in Telecommunications” (MIT Press), “A Theory of Incentives in Procurement and Regulation” (MIT Press), “Incentives in Public Decision Making: Essays in Economics of Uncertainty” (Harvard University Press) and “Incentives and Political Economy” (Oxford University Press). He was on the editorial boards of numerous scholarly journals, including Journal of Public Economics, Journal of Public Economic Theory and European Journal of Political Economy.
Laffont earned his Ph.D. in economics from Harvard University in 1975, where he was awarded the Wells Prize, and a Ph.D. in applied mathematics from Paris Universite Dauphine in 1972. He earned an M.S. in mathematics from the University of Toulouse.
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