Princeton Alumnus Oliver Hart *74 wins Nobel Prize for Economics

Oliver Hart *74, an economist known for his decades-long research into contracts and corporate ownership structures, was awarded the Nobel Prize for Economics on October 10th, along with MIT economist Bengt Holmström.

Hart, who was born in London and earned a Ph.D. at Princeton, has taught at Harvard since 1993. Hart and Holmström, who sometimes collaborated, “are among a handful of key contributors to studying the incentives that are created by the forms of relationships between a firm and its suppliers, employees and investors,” said Stanford University economist Roger Noll.

The Royal Swedish Academy of Sciences cited Hart’s studies of  “incomplete contracts” as one of his most important lines of inquiry. “Modern economies are held together by innumerable contracts,” the academy said in its announcement. Hart and Holmström’s “analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions.”

One of Hart’s key insights was that contracts, by their nature, are “incomplete” since they cannot be written in a way that foresees every possible contingency. As a result, the allocation of power and incentives within the contract becomes critical. This can have significant consequences on whether, say, a company owns a subsidiary or chooses to contract with an outside firm.

The research of Hart and his various co-authors, said Princeton economist Wolfgang Pesendorfer, is “very influential. He and other researchers used it to understand the organizational structure of firms, financial contracts, patterns of asset ownership, and
related issues.”

Luigi Zingales, a finance professor at the University of Chicago’s Booth School of Business, called Hart “the most intellectually honest person I know.”

“He is single-minded in the pursuit of the truth, and he is fearless in the defense of the results of his analysis,” Zingales wrote after Hart received the Nobel. “He is not afraid to go against conventional wisdom, even when he is alone. Yet, he is also ready to revise his views based on the contributions of others.”

As an example, Zingales cited Hart’s 20-year search for the intellectual foundations of incomplete contracts. After his initial explanation was challenged by two other Nobel winners, Eric Maskin and Jean Tirole, Hart, at age 60, “had the intellectual courage to admit defeat. He recognized that Maskin and Tirole’s criticisms of the intellectual foundations of his theory were correct and that he had to change them. And he did.”  

Article from the Princeton Alumni Weekly

Princeton University Professor F. Duncan Haldane awarded the 2016 Nobel Prize in Physics

Princeton University professor F. Duncan Haldane has been awarded the 2016 Nobel Prize in Physics "for theoretical discoveries of topological phase transitions and topological phases of matter."

Haldane, the Eugene Higgins Professor of Physics who joined the Princeton faculty in 1990, shares the prize with David Thouless of the University of Washington and J. Michael Kosterlitz of Brown University.

"They have used advanced mathematical methods to study unusual phases, or states, of matter, such as superconductors, superfluids or thin magnetic films," the Royal Swedish Academy of Sciences said in announcing the award. 

"I was very surprised and very gratified," the professor said during the Nobel news conference. 

Kosterlitz was a visiting professor at Princeton in 1978.

Haldane said in an interview that it was "the usual thing" when he received notification of his award: a call from Sweden awakened him at home around 4:30 a.m. Princeton time.

"My work was a kind of sleeper," he said. "It was a very theoretical thing. ... It didn't become such a big deal until my work got extended" by other scientists.

On the nature of discovery, he said: "All these things are things that no one expects. You stumble over something and then you find the big picture after."

Haldane, who taught a regularly scheduled graduate class Tuesday, joins several other Princeton faculty members who have received a Nobel Prize in physics, including Philip Anderson, Joseph Taylor, Daniel Tsui and David Gross.

Haldane earned his B.A. in 1973 and Ph.D. in 1978, both from the University of Cambridge. 

From 1977 to 1981 he was a physicist at Institut Laue-Langevin in Grenoble, France. He joined the faculty at the University of Southern California in 1981. He served as a member of the technical staff at AT&T Bell Laboratories, Murray Hill from 1985 to 1988, and was a professor at the University of California-San Diego from 1986 to 1992.

He was elected a fellow of the American Physical Society in 1986 and awarded a Sloan Foundation fellowship from 1984 to 1988. 

http://www.princeton.edu/main/news/archive/S47/55/75S63/