Bengt Holmstrom and Contract Theory
In December, MIT professor Bengt Holmstrom was awarded the Nobel Prize in Economics, which he shares with Professor Oliver Hart, for their work on contract theory. In the words of the committee that recommended them for the prize: "An eternal obstacle to human cooperation is the fact that people have different interests. In modern societies, conflicts of interest are often relieved -- if not completely resolved -- with contractual agreements. Well-designed contracts offer incentives to the parties that make it possible to reap the potential rewards of collaboration."
Bibliographic citation: Ricart, Joan Enric, "Bengt Holmstrom and Contract Theory". Alumni Magazine 01/01/2017