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Economists win Nobel for contract theory Economists win Nobel for contract theory
(35 minutes later)
UK-born Oliver Hart and Bengt Holmstrom of Finland have won the Nobel Economics Prize for work on contract theory.UK-born Oliver Hart and Bengt Holmstrom of Finland have won the Nobel Economics Prize for work on contract theory.
Judges said their work laid "an intellectual foundation" for policies in areas such as bankruptcy legislation and political constitutions.Judges said their work laid "an intellectual foundation" for policies in areas such as bankruptcy legislation and political constitutions.
The pair will receive 8 million Swedish kroner (£744,652) from the committee.The pair will receive 8 million Swedish kroner (£744,652) from the committee.
It comes after Nobel prizes for physiology or medicine, physics, chemistry and peace were awarded last week.It comes after Nobel prizes for physiology or medicine, physics, chemistry and peace were awarded last week.
This breaking news story is being updated and more details will be published shortly. Please refresh the page for the fullest version. The Royal Swedish Academy of Sciences said that Mr Hart and Mr Holmstrom's work was "valuable to the understanding of real-life contracts and institutions".
If you want to receive Breaking News alerts via email, or on a smartphone or tablet via the BBC News App then details on how to do so are available on this help page. You can also follow @BBCBreaking on Twitter to get the latest alerts. It also said it could identify "potential pitfalls in contract design."
For example, contract theory can be used to assess performance-based pay for top executives, the academy said.
Mr Hart, born in 1948, is an economics professor at Harvard University in the US, while Mr Holmstrom is a professor of economics and management at Massachusetts Institute of Technology.
The pair saw off competition from the World Bank's new chief economist Paul Romer, who was tipped to win.