**Stockholm:** Oliver Hart, of Harvard University, and Bengt Holmström, of the Massachusetts Institute of Technology, won the 2016 Nobel Memorial Prize in Economic Science on Monday “for their contributions to contract theory.”
Hart is economics professor at Harvard University while Holmstrom is professor of economics and management at the Massachusetts Institute of Technology. His work has helped understanding which companies should merge and the right mix of financing and when institutions such as such as schools should be privately or publicly owned, the academy said in a statement.
Holmström, 67, was born in Helsinki, Finland. He earned a Ph.D. from Stanford University, and has been a professor of economics and management at MIT since 1994. According to The New York Times, he previously taught at Northwestern and Yale. His work helped how to formulate contracts for executives.
Holmstrom’s work helped how to formulate contracts for executives, the statement added.
Economics is the fifth of this year’s Nobels. The prizes for physiology or medicine, physics, chemistry and peace were awarded last week. The literature prize is due on Thursday.