The Nobel Prize for Economics has been awarded to two academics, Oliver Hart and Bengt Holmström, for their contributions to contract theory — the agreements that shape business, finance and public policy.
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.
Oliver Hart is a professor of economics at Harvard University.
Bengt Holmström is a professor of economics and Management at Massachusetts Institute of Technology.
More information can be found on the Nobel Prize organization’s web page.