Oliver Hart and Bengt Holmström have just been announced as the winners of the 2016 Nobel Prize in Economic Sciences. Citing their "contributions to contract theory", the Royal Swedish Academy of Sciences went on to note that:
Modern economies are held together by innumerable contracts. The new theoretical tools created by Hart and Holmström are valuable to the understanding of real-life contracts and institutions, as well as potential pitfalls in contract design...
This year’s laureates have developed contract theory, a comprehensive framework for analysing many diverse issues in contractual design, like performance-based pay for top executives, deductibles and co-pays in insurance, and the privatisation of public-sector activities.
From Oxford University Press and the Oxford Scholarship Online team, we'd like to extend our sincere congratulations to both winners. To celebrate this amazing accolade, we've made the introduction to Oliver Hart's book, Firms, Contracts, and Financial Structure, Holmström's chapter on 'Grossman-Hart (1986) as a Theory of Markets' and Josh Lerner's chapter on Hart's contributions, freely available for a limited time on Oxford Scholarship Online.
Take a look at the chapters below to gain a greater understanding of these two Nobel Laureates and their writing.
- Oliver Hart, 'Introduction' in Firms, Contracts, and Financial Structure >>
- Bengt Holmström, 'Grossman-Hart (1986) as a Theory of Markets', in Aghion et al (eds.), The Impact of Incomplete Contracts on Economics >>
- Josh Lerner, 'Oliver Hart's Contributions to the Understanding of Strategic Alliances and Technology Licensing', in Aghion et al (eds.), The Impact of Incomplete Contracts on Economics >>