UK-born professor wins Nobel Economics Prize
A UK-born professor, who now works at Harvard University in the United States, has won the Nobel Prize in Economics.
Professor Oliver Hart, 68, was awarded the prestigious accolade jointly with Bengt Holmstrom of Finland for their contributions to contract theory.
Their work has implications for understanding issues like performance-based pay for top executives, bankruptcy legislation and corporate governance, said the Royal Swedish Academy of Sciences.
“The new theoretical tools created by Hart and Holmstrom are valuable to the understanding of real-life contracts and institutions, as well as potential pitfalls in contract design,” the academy said.
Professor Hart, who was born in London, is now an American citizen.
“I woke at about 4.40am and was wondering whether it was getting too late for it to be this year, but then fortunately the phone rang,” he was quoted as saying on the official Twitter account of The Nobel Prize.
“My first action was to hug my wife, wake up my younger son… and I actually spoke to my fellow laureate.”
Bengt Holmstrom said he was glad to share the prize with his ‘closest friend’
The academy said: “His research provides us with theoretical tools for studying questions such as which kinds of companies should merge, the proper mix of debt and equity financing, and which institutions such as schools or prisons ought to be privately or publicly owned.”
Professor Holmstrom works at Massachusetts Institute of Technology.
His “informativeness principle” showed how the contract should link the agent’s pay to information relevant to his or her performance, carefully weighing risks against incentives, the academy said.
The 67-year-old, who has also served on the board of Finnish mobile phone company Nokia, said he felt “very lucky” and “grateful” to win the award.
He added: “Oliver Hart, I’m so glad that I won it with him, he’s my closest friend here.”
Monday’s announcement follows awards in medicine, physics, chemistry and the Nobel Peace Prize which this year was awarded to Colombian President Juan Manuel Santos for his efforts to bring an end to 52 years of conflict in his country.
The Nobel Prize in Physics was awarded to three British-born scientists – David Thouless, Duncan Haldane and Michael Kosterlitz – for revealing the secrets of unusual states of matter, leading to advances in electronics.
Each award is worth eight million kronor (£747,000).
The laureates will be presented with their awards on 10 December, the anniversary of prize founder Alfred Nobel’s death in 1896.
UK-born professor wins Nobel Economics Prize
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