Holmström, Bengt, 1949–, Finnish economist, b. Helsinki, Ph.D. Stanford, 1978. He has spent almost all his career in academia, at Northwestern Univ. (1979–83), Yale (1983–94), and the Massachusetts Institute of Technology (1994–). A microeconomist specializing in contract theory and the role of incentives, he has done extensive work on employment contracts, clarifying how best to structure a contract between a principal, such as an employer or a company's owners, and an agent, such an employee or a company's manager, and how compensation should be based on all the outcomes that provide information about the agent's performance and should balance incentives and risks. In 2016 he shared the Nobel Memorial Prize in Economic Sciences with Oliver Hart for their contributions to contract theory, which increased the understanding of contracts and institutions and exposed potential problems in contract design.
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