U.K.-born Oliver Hart and Finland-born Bengt Holmstrom won the 2016 Nobel Memorial Prize in Economic Science for “their contributions to contract theory,” the Royal Swedish Academy of Sciences said on Monday.
“[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 krona ($1.2 million Cdn).
Contract theory: Should teachers, healthcare workers, and prison guards be paid fixed salaries or should their pay be performance-based?
Contract theory: Should providers of public services, such as schools, hospitals, or prisons, be publicly or privately owned? #NobelPrize
Contract theory: To what extent should managers be paid through bonus programmes or stock options? #NobelPrize
Hart is a professor of economics at Harvard and Holmstrom is a professor of economics and management at MIT.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.
Economy is the fifth of this year’s Nobels. The prizes for physiology or medicine, physics, chemistry and peace were awarded last week. The literature prize is due on Thursday.
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Article source: http://www.cbc.ca/news/business/nobel-economics-prize-1.3798644?cmp=rss