Finnish Bengt Holmström Received Nobel Prize in Economic Sciences
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 from Harvard University and Bengt Holmström from Massachusetts Institute of Technology “for their contributions to contract theory”. Holmström is the seventh Finnish Nobel Prize laureate.
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. As 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, a comprehensive framework for analyzing many diverse issues in contractual design, like performance-based pay for top executives, deductibles and co-pays in insurance, and the privatisation of public-sector activities.
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.
Holmström is participating actively in the public debate in Finland and is well known economist worldwide. He received his B.S. in mathematics and science from the University of Helsinki. He is currently Aalto University Board member and was a member of Nokia's board of directors from 1999-2012. He holds also several other position of trust. Holmström is the seventh Finnish Nobel Prize laureate.
We warmly congratulate Holmström for winning the Nobel Prize!
Read the whole Press Release: www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2016/press.html
Further information: http://nobelprize.org