10/10/2016 3:23 PM IST | Updated 10/10/2016 4:01 PM IST

2016 Nobel Prize In Economics Awarded To Harvard, MIT Professors

Oliver Hart, of Harvard University, and Bengt Holmström, of the Massachusetts Institute of Technology, won the 2016 Nobel Memorial Prize in Economic Science on Monday “for their contributions to contract theory.”

”(Their work) lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions,” the award-giving body said on announcing the 8 million Swedish crown ($928,000) prize.

Hart, 68, was born in London and studied at University College London, Cambridge University and Warwick University, before receiving his Ph.D. from Princeton. He has been a professor of economics at Harvard since 1993.

His work has helped understanding which companies should merge and the right mix of financing and when institutions such as such as schools should be privately or publicly owned, the academy said in a statement. 

Holmström, 67, was born in Helsinki, Finland. He earned a Ph.D. from Stanford University, and has been a professor of economics and management at MIT since 1994. According to The New York Times, he previously taught at Northwestern and Yale. His work helped how to formulate contracts for executives.


Sveriges Riksbank, Sweden’s central bank, established the economics sciences prize in 1968 to honor the memory of Alfred Nobel. It was not part of the original group of awards set out in the dynamite tycoon’s 1895 will.

The prizes for physiology or medicine, physics, chemistry and peace were awarded last week. The literature prize is due on Thursday. 

This is a developing story. More to come...