NOBEL PRIZE FOR 2016 - OLIVER HART - CONTRIBUTION TO CONTRACT THEORY

Scientific review article
Autor: Svetlana Pantelić
JEL: G30, K12
doi: 10.5937/bankarstvo1604168P
SCINDEX

Summary: Oliver Hart and Bengt Holmstrom share the Nobel Prize in Economic Sciences for 2016, awarded to them by Sveriges Riksbank. They have been rewarded for their work in enhancing the design of contracts, i.e. arrangements connecting employers with employees or companies with clients, in other words, for their contribution to contract theory in the 1970s and 1980s. 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 is an expert in contract theory, theory of the firm, corporate finance, and law and economics. His contribution to contract theory is exquisite when it comes to designing contracts which cover eventualities that cannot be precisely specified in advance.

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