This year’s Nobel Prize in Economics has been awarded for research that looks at how contracts help society to deal with conflicting interests.
Oliver Hart, Andrew E. Furer professor of economics at Harvard University, and Bengt Holmström, Paul A. Samuelson professor of economics at the Massachusetts Institute of Technology, will share the 8 million krona (£745,000) prize.
Professor Hart and Professor Holmström's work to develop new theoretical tools in contract theory has influenced many fields, including corporate governance and constitutional law, said the Swedish Academy.
“The contributions by the laureates have helped us understand many of the contracts we observe in real life. They have also given us new ways of thinking about how contracts should be designed, both in private markets and in the realm of public policy,” it added.
Professor Hart is originally from the UK and Professor Holmström hails from Finland.