Oliver Hart and Bengt Holmström Win the Nobel Peace Prize in Economics

Economists Oliver Hart and Bengt Holmström won the 2016 Nobel Peace Prize in Economics for their work in contract theory. The two will share the $926,000 prize. Bloomberg tells us more of the story:

The two “so obviously” deserve the prize, Paul Krugman, who himself won a Nobel economics prize in 2008, wrote on his twitter account. Krugman said his first thought was: “Didn’t they have it already?”

Contract theory has “greatly influenced many fields,” the Royal Swedish Academy said. These include everything from corporate governance to constitutional law. Because of Hart and Holmström “we now have the tools to analyze not only contracts’ financial terms, but also the contractual allocation of control rights, property rights, and decision rights between parties.”




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