Harvard, MIT Economists Win Nobel Prize

Oliver Hart and Bengt Holmström will split the million-dollar reward.

Photos via Harvard Economics, MIT Economics

Photos via Harvard Economics, MIT Economics

Economists from Harvard and MIT shared the 2016 Nobel Prize in Economics, the Royal Swedish Academy of Sciences announced Monday morning.

Harvard’s Oliver Hart, a 68-year-old, London-born economics professor, and MIT’s Bengt Holmström, a 67-year-old, Finnish citizen, won this year’s Nobel Prize for their contributions to contract theory.

“Through their initial contributions, Hart and Holmström launched contract theory as a fertile field of basic research. Over the last few decades, they have also explored many of its applications,” the Academy said in its announcement. “Their analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions.”

Hart and Holmström’s reward is 8 million Swedish krona—equivalent to $923,968.80 in U.S. dollars—to be split equally between them. Both men joined their Cambridge schools in the early 90s.

The Nobel Prize in Economics has been awarded since 1969. Monday marks the 49th time a Harvard faculty member has received a Nobel Prize in any field, while Holmström is the fifth person to win the Nobel Prize in Economics while serving as a member of the MIT faculty.