The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2016 to Oliver Hart (Harvard University) and Bengt Holmström (Massachusetts Institute of Technology) “for their contributions to contract theory.”
Both Professor Hart and Professor Holmström are members of the Barcelona GSE Scientific Council, a body of leading academics that works to ensure the quality of BGSE research and programs while strengthening its relationships with the wider academic community.
A theory that has given rise to many applications
Per Strömberg, Chairman of the Economic Sciences Prize Committee, explained that the prize recognizes Hart and Holmström’s contribution to our understanding of one of society’s fundamental instruments. “Contracts are everywhere in society...both strands of research [by Hart and Holmström] have proven incredibly influential across the social sciences,” Professor Strömberg said.
— The Nobel Prize (@NobelPrize) October 10, 2016
From the popular science summary of the Prize:
“Contract theory has greatly influenced many fields, ranging from corporate governance to constitutional law. Thanks to the work of Hart and Holmström, we now have the tools to analyse not only contracts’ financial terms, but also the contractual allocation of control rights, property rights, and decision rights between parties. The contributions by the laureates have helped us understand many of the contracts we observe in real life. They have also given us new ways of thinking about how contracts should be designed, both in private markets and in the realm of public policy.”
With the addition of the 2016 Prize, the BGSE Scientific Council now includes 13 recipients of the prestigious award:
- Kenneth J. Arrow (Stanford University)
- Oliver Hart (Harvard University)
- James J. Heckman (University of Chicago)
- Bengt Holmström (Massachusetts Institute of Technology)
- Daniel Kahneman (Princeton University)
- Robert Lucas (University of Chicago)
- James A. Mirrlees (University of Cambridge)
- Edward C. Prescott (Arizona State University)
- Alvin Roth (Stanford University)
- Thomas J. Sargent (New York University)
- Christopher A. Sims (Princeton University)
- Robert M. Solow (Massachusetts Institute of Technology)
- Joseph E. Stiglitz (Columbia University)
The Scientific Council has also included three other distinguished Nobel laureates who have passed away in recent years. They are Reinhard Selten, Dale T. Mortensen, and Paul A. Samuelson.