Updated: Hart GS '74 wins 2016 Nobel Prize in Economics
Norman Xiong and Sharon XiangOliver Hart GS ’74 has been awarded the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his contributions to contract theory, according to a press release by the Nobel Foundation.Hart was jointly awarded the prize with Bengt Holmström, economics professor at the Massachusetts Institute of Technology.“Hart made fundamental contributions to a new branch of contract theory that deals with the important case of incomplete contracts,” the Royal Swedish Academy of Sciences said in its press release announcing the award.“Hart’s findings on incomplete contracts have shed new light on the ownership and control of businesses and have had a vast impact on several fields of economics, as well as political science and law," the press release stated.Hart’s studies focused on incomplete contracts and how they are unable to predict future conflicts.“[A] contract that cannot explicitly specify what the parties should do in future eventualities, must instead specify who has the right to decide what to do when the parties cannot agree.
