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The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2016

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2016 Press release from the Royal Swedish Academy of SciencesThe Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2016 toOliver Hart, Harvard University, Cambridge, MA, USAandBengt Holmström, Massachusetts Institute of Technology, Cambridge, MA, USA“for their contributions to contract theory”The Long and Short of ContractsModern economies are held together by innumerable contracts. The new theoretical tools created by Oliver Hart and Bengt Holmström are valuable to the understanding of real‐life contracts and institutions, as well as to the potential pitfalls in contract design.Society's many contractual relationships include those between shareholders and top executive management, an insurance company and car owners, or a public authority and its suppliers. Because such relationships typically entail conflicts of interest, contracts must be properly designed to ensure that the parties take mutually beneficial decisions. This year's laureates have developed contract theory, which is a comprehensive framework for analyzing many diverse issues in contractual design, such as performance‐based pay for top executives, deductibles and co‐pays in insurance, and the privatization of public‐sector activities.In the late 1970s, Bengt Holmström demonstrated how a principal (e.g., a company's shareholders) should design an optimal contract for an http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Scandinavian Journal of Economics Wiley

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2016

The Scandinavian Journal of Economics , Volume 119 (3) – Jul 1, 2017
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Publisher
Wiley
Copyright
© 2017 The editors of The Scandinavian Journal of Economics.
ISSN
0347-0520
eISSN
1467-9442
DOI
10.1111/sjoe.12252
Publisher site
See Article on Publisher Site

Abstract

Press release from the Royal Swedish Academy of SciencesThe Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2016 toOliver Hart, Harvard University, Cambridge, MA, USAandBengt Holmström, Massachusetts Institute of Technology, Cambridge, MA, USA“for their contributions to contract theory”The Long and Short of ContractsModern economies are held together by innumerable contracts. The new theoretical tools created by Oliver Hart and Bengt Holmström are valuable to the understanding of real‐life contracts and institutions, as well as to the potential pitfalls in contract design.Society's many contractual relationships include those between shareholders and top executive management, an insurance company and car owners, or a public authority and its suppliers. Because such relationships typically entail conflicts of interest, contracts must be properly designed to ensure that the parties take mutually beneficial decisions. This year's laureates have developed contract theory, which is a comprehensive framework for analyzing many diverse issues in contractual design, such as performance‐based pay for top executives, deductibles and co‐pays in insurance, and the privatization of public‐sector activities.In the late 1970s, Bengt Holmström demonstrated how a principal (e.g., a company's shareholders) should design an optimal contract for an

Journal

The Scandinavian Journal of Economics – Wiley

Published: Jul 1, 2017

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