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French economist Jean Tirole has won the Nobel Prize in economics for his work on market power and regulation.

The prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was set up in 1968.

It was not one of the original awards set out in dynamite industrialist Mr Nobel's 1895 will.

Mr Tirole, 61, wins a prize of 8m Swedish krona (£692,000).

He is six years younger than the average age of Nobel economics laureates.

Regulators and competition authorities have obtained "a whole new set of tools" from Mr Tirole's work, according to the Royal Swedish Academy of Sciences, which announced the award.

'Very grateful'

Mr Tirole, the second Frenchman to win a Nobel award this year, is "one of the most influential economists of our time", the jury said.

"I'm really very grateful," Mr Tirole said.

"Many industries are dominated by a small number of large firms or a single monopoly," the jury said of Mr Tirole's work. "Left unregulated, such markets often produce socially undesirable results - prices higher than those motivated by costs, or unproductive firms that survive by blocking the entry of new and more productive ones."

Before Mr Tirole's work, governments and regulators often used simple rules such as capping prices for companies with a monopoly and banning co-operation between competitors, said the Royal Swedish Academy. Mr Tirole showed that under some conditions, doing so can do more harm than good.

Last year, US academics Eugene Fama, Lars Peter Hansen and Robert Shiller won for their "empirical analysis of asset prices", according to the awarding committee.

The committee said the trio's separate pieces of work had "laid the foundation for the current understanding of asset prices".

The economics prize is the last to be awarded in a series which included the award of the peace prize to 17-year-old child rights campaigner Malala Yousafzai and India's Kailash Satyarthi, and the literature prize to French writer Patrick Modiano.

The awards will be presented on 10 December, the anniversary of prize founder Alfred Nobel's death in 1896.