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Nobel Prize for economics awarded to Oliver Hart and Bengt Holmstrom Nobel Prize for economics awarded to Oliver Hart and Bengt Holmstrom
(about 1 hour later)
The Nobel Prize for Economics has been won by a Briton and a Finnish-American for their pioneering work on contract theory.The Nobel Prize for Economics has been won by a Briton and a Finnish-American for their pioneering work on contract theory.
Oliver Hart and Bengt Homstrom were named by the Royal Swedish Academy of Sciences in Stocholm today.Oliver Hart and Bengt Homstrom were named by the Royal Swedish Academy of Sciences in Stocholm today.
Holt, 68, is Professor of Economics at Harvard University and Holmstrong, 67, is Professor of Economics at the Massachusetts Institute of Technology.Holt, 68, is Professor of Economics at Harvard University and Holmstrong, 67, is Professor of Economics at the Massachusetts Institute of Technology.
"Through their initial contributions, Hart and Holmström launched contract theory as a fertile field of basic research. Over the last few decades, they have also explored many of its applications. Their analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions," the Academy said. The pair will share the 8m Swedish krona (£747,000) prize between them.
Through their initial contributions, Hart and Holmström launched contract theory as a fertile field of basic research. Over the last few decades, they have also explored many of its applications. Their analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions," the Academy said.
Last year's winner of the prize was Angua Deaton, like Mr Holt, another British economist who works in the US.
In response to the news Mr Hart said: "I woke at 4.40am and was wondering whether it was getting too late for it to be this year, but then fortunately the phone rang".
"Contracts are just an incredibly powerful way of thinking about parts of economics. They’re just fundamental to the whole idea that trade is a quid pro quo and that there are two sides to a transaction”.
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