US-based 'contract theory' economists win Nobel prize

ANKARA (AA) – Two U.S.-based academics were awarded the 2016 Nobel prize in economics Monday for their work on “contract theory” -- research which helps understand the role of legal agreements in modern economies.

Oliver Hart and Bengt Holmstrom, from Harvard University and the Massachusetts Institute of Technology respectively, were awarded the accolade by 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 institute said in a statement.

A prize of eight million Swedish krona ($923,770) will be shared equally between the duo.

With a ceremony to be held on the anniversary of Alfred Nobel’s death on Dec. 10, both laureates will be awarded with a certificate and a medal by the Swedish academy.