Image copyright Getty Images Image caption Oliver Hart and Bengt Holmstrom will share the 8 million Swedish krona (£744,652) prize

UK-born Oliver Hart and Bengt Holmstrom of Finland have won the Nobel economics prize for work on contract theory. After the announcement, he tweeted: 



The prize givers said the award reflected the pair’s role in launching contract theory as a “fertile field of basic research” and their subsequent work that has helped lay a foundation for designing policies and institutions in areas from bankruptcy legislation to political constitutions. Holmström, now working at the Massachusetts Institute of Technology, and Hart of Harvard University, drew praise and congratulations from fellow economists, although they had not been seen as frontrunners for the honour, officially known as the Sveriges Riksbank prize in economic sciences in memory of Alfred Nobel. “This year’s laureates have developed contract theory – a comprehensive framework for analysing many diverse issues in contractual design, like performance-based pay for top executives, deductibles and co-pays in insurance, and the privatisation of public-sector activities.”

Hart’s research work has included a damning assessment of America’s private prisons.
British-born American Oliver Hart and Finnish Bengt Holmström win the Nobel Prize in Economics for their work on the science of contracts.