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.