Mr. Shaman
Seer
Yeah.....shocking....Right?
2016 American Nobel Laureates; STILL No Teabaggers!
- Thread starter Mr. Shaman
- Start date
evince
Truthmatters
http://www.bloomberg.com/news/articl...e-in-economics
The two “so obviously” deserve the prize, Paul Krugman, who himself won a Nobel economics prize in 2008, wrote on his twitter account. Krugman said his first thought was: “Didn’t they have it already?”
Contract theory has “greatly influenced many fields,” the Royal Swedish Academy said. These include everything from corporate governance to constitutional law. Because of Hart and Holmström “we now have the tools to analyze not only contracts’ financial terms, but also the contractual allocation of control rights, property rights, and decision rights between parties.”
Designing Contracts
Holmström’s theories in the 1970s helped companies design compensation contracts for employees where performance can only be partly measured. His “informativeness principle” argues that pay should also depend on outside factors, such as linking a manager’s pay to the share price relative to competitors. This helps to avoid rewarding people for “good luck” and punishing them for “bad luck,” the academy said.
Holmström said he was “very happy, very grateful, and overwhelmed” during an event at MIT to mark the award, after first apologizing for disturbing his colleagues on Columbus Day, a federal holiday in the U.S. While declining to lecture his audience on his work because “those who understand know it already, and those who don’t understand won’t be wiser if I tell it,” he did voice concern about stagnant U.S. middle-class wages.
“What we are seeing right now in the way market economics is playing itself out is of great concern. I would much rather live in a society where this isn’t happening,” he said in response to a question, though he declined to take a stand on whether the compensation of top executives was too high. “Economics doesn’t really have an opinion on the level.”
The two “so obviously” deserve the prize, Paul Krugman, who himself won a Nobel economics prize in 2008, wrote on his twitter account. Krugman said his first thought was: “Didn’t they have it already?”
Contract theory has “greatly influenced many fields,” the Royal Swedish Academy said. These include everything from corporate governance to constitutional law. Because of Hart and Holmström “we now have the tools to analyze not only contracts’ financial terms, but also the contractual allocation of control rights, property rights, and decision rights between parties.”
Designing Contracts
Holmström’s theories in the 1970s helped companies design compensation contracts for employees where performance can only be partly measured. His “informativeness principle” argues that pay should also depend on outside factors, such as linking a manager’s pay to the share price relative to competitors. This helps to avoid rewarding people for “good luck” and punishing them for “bad luck,” the academy said.
Holmström said he was “very happy, very grateful, and overwhelmed” during an event at MIT to mark the award, after first apologizing for disturbing his colleagues on Columbus Day, a federal holiday in the U.S. While declining to lecture his audience on his work because “those who understand know it already, and those who don’t understand won’t be wiser if I tell it,” he did voice concern about stagnant U.S. middle-class wages.
“What we are seeing right now in the way market economics is playing itself out is of great concern. I would much rather live in a society where this isn’t happening,” he said in response to a question, though he declined to take a stand on whether the compensation of top executives was too high. “Economics doesn’t really have an opinion on the level.”