The Royal Swedish Academy of Sciences has decided to award the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel jointly to Oliver Hart of Harvard University and Bengt Holmström of Massachusetts Institute of Technology (MIT) for their contributions to contract theory.
“Modern economies are held together by innumerable contracts. The new theoretical tools created by Hart and Holmström are valuable to the understanding of real-life contracts and institutions, as well as potential pitfalls in contract design,” the Royal Swedish Academy of Sciences, which awarded the prize, said in a press release.
Holmström was born in Helsinki, Finland, and has been a professor of economics and management at MIT since 1994. He previously taught at Yale University. Hart was born in London. He has been a professor of economics at Harvard since 1993.