Why contract theory won the Nobel economics prize
The prize for economics goes to two men who have helped reduce risk in contract design.
Honours: a Nobel medal. Photo: Pe3k / Shutterstock.com
Harvard’s Oliver Hart and Bengt Holmström from the Massachusetts Institute of Technology have won the Nobel Prize for economics for their research into contract theory. Their contributions have helped our understanding of the often conflicting incentives that operate in the contracts that enable cooperation between individuals, between employers and their workers, between governments, and which affect all of our lives.
The Royal Swedish Academy of Sciences, which decides the winners of the economics prize, said the pair had developed "a comprehensive framework for analysing many diverse issues in contractual design, like performance-b
For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda
Related Stories
-
Why 2021 is a year of opportunity for boards to build business resilience
Integrated thinking connects companies to the needs of their stakeholders, which fosters business resilience and creates long-term value.
-
Grant Thornton’s decision throws a cloud over audit market
Grant Thornton's decision to stop pitching for big audit contracts raises fresh questions about the UK's audit market.
-
What’s a company for? An answer from Ancient Greece
An imagined dialogue between Milton Friedman, the economist who has come to represent the shareholder primacy world view, and Socrates.
