The 2016 Nobel Prize: Incentives, Property Rights, And Ownership

The 2016 Nobel Prize: Incentives, Property Rights, and Ownership by Peter G. Klein, Mises Institute

The 2016 Nobel Prize in economics was awarded today to Oliver Hart and Bengt Holmström, two of the most eminent economists specializing in the analysis of contracting and organizational structure. Hart, a British economist who teaches at Harvard, and Holmström, originally from Finland and now teaching at MIT, are leading practitioners of the formal, mathematical analysis of firms, contracts, and organizations. Hart is best known for his contributions to the “incomplete-contracting” or “property-rights” approach to the firm, while Holmström is considered the founder of modern principal-agent theory. Both have long been considered frontrunners for the prize (Paul Krugman tweeted...