Oliver D. Hart and Bengt R. Holmström Were Awarded Nobel Prize in 2016 for Research on Contracts

Oliver D. Hart and Bengt R. Holmström won the Nobel Memorial Prize in Economic Sciences in 2016 for their contributions to analyzing incentives, institutions, and organizations in the field of contract theory.

"Contract theory provides us with a general means of understanding contract design. One of the theory's goals is to explain why contracts have various forms and designs. Another goal is to help us work out how to draw up better contracts, thereby shaping better institutions in society," the Royal Swedish Academy of Sciences said in a statement announcing the award. "The contributions of this year's laureates are invaluable in helping us understand real-life contracts and institutions, as well as the potential pitfalls when designing new contracts."

At the time of the award, Hart was the Andrew E. Furer Professor of Economics at Harvard University and a research associate in the NBER programs in Corporate Finance and Law and Economics. Holmström was the Paul A. Samuelson Professor of Economics at MIT and a research associate in the NBER Corporate Finance Program. Both were active in the NBER’s Working Group on Organizational Economics.

More information on these Nobel laureates