Oliver Hart and Bengt Holmstrom Win Nobel in Economics for Work on Contracts

nytimes.com

7 points·tambourine_man··4 comments

Interesting regarding incentivization:

>Where measures of job performance are inadequate ...erformance pay can backfire

>Companies have turned increasingly to this kind of deferred compensation, particularly for senior executives.

I think this can only help and not only for CxOs but also premier athletes who on occasion are known to have terrible seasons.

and Contracts:

>[...] And sometimes, he concluded, it is more efficient for companies to simply merge [rather than rely on contracts] because a single owner would make better overall decisions.

Definitely interesting ideas which have not completely caught on in industry or government regulation.

It still baffles me there are no Nobel prizes for engineering, yet we have one for economics.

Well, it was never the intention of Alfred Nobel to have a prize for Economics. The so-called "Nobel Memorial Prize in Economics" was established after a large donation from the Bank of Sweden in 1968, but has been regarded by many (including Nobel's grandson) as an inauthentic award.

The Nobel price for economics was awared to quite a few mathematicians.

Leonid Kantorovich won it for applying his results in Operations Research [1] to planning the Russian economy.

John Nash won it for .. of course .. Game Theory.

[1] He proved criteria for the convergence of the Newton Method and quite a bit more. Those results are applied really everywhere nowadays.

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