2016 Nobel Prize in Economic Sciences

The 2016 Nobel Prize in Economic Sciences has been awarded to Oliver Hart and Bengt Holmström. The prize was announced by the Royal Swedish Academy of Sciences in Stockholm on 10 October 2016.

The citation

The citation reads: "for their contributions to contract theory". They share the prize equally.

The laureates

Oliver Hart was born in 1948 in London, United Kingdom, and is affiliated with Harvard University, Cambridge. Bengt Holmström was born in 1949 in Helsinki, Finland, and is affiliated with the Massachusetts Institute of Technology (MIT), Cambridge.

Why it matters

Contract theory helps design agreements such as pay deals for executives and contracts for public services. Hart was born in London and works at Harvard.

The prize

The prize is worth 8 million Swedish kronor, divided between the laureates. It will be presented at a ceremony in Stockholm on 10 December, the anniversary of the death of Alfred Nobel, the Swedish inventor of dynamite whose will founded the prizes in 1895. Strictly, this award is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was established by the Swedish central bank in 1968, but is presented alongside the Nobel Prizes.