Bengt Robert Holmström (born 18 April 1949) is a Finnish

economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...

who is currently Paul A. Samuelson Professor of Economics (Emeritus) at the

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the ...

. Together with Oliver Hart, he received the Central Bank of Sweden

Nobel Memorial Prize in Economic Sciences The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...

in 2016.

Early life and education

Holmström was born in

Helsinki, Finland Helsinki ( or ; ; sv, Helsingfors, ) is the capital, primate, and most populous city of Finland. Located on the shore of the Gulf of Finland, it is the seat of the region of Uusimaa in southern Finland, and has a population of . The city' ...

on 18 April 1949, and belongs to the Swedish speaking minority of Finland. He received his

B.S. A Bachelor of Science (BS, BSc, SB, or ScB; from the Latin ') is a bachelor's degree awarded for programs that generally last three to five years. The first university to admit a student to the degree of Bachelor of Science was the University ...

in mathematics and science from the

University of Helsinki The University of Helsinki ( fi, Helsingin yliopisto, sv, Helsingfors universitet, abbreviated UH) is a public research university located in Helsinki, Finland since 1829, but founded in the city of Turku (in Swedish ''Åbo'') in 1640 as the ...

in 1972. He also received a

Master of Science A Master of Science ( la, Magisterii Scientiae; abbreviated MS, M.S., MSc, M.Sc., SM, S.M., ScM or Sc.M.) is a master's degree in the field of science awarded by universities in many countries or a person holding such a degree. In contrast to ...

degree in

Operations Research Operations research ( en-GB, operational research) (U.S. Air Force Specialty Code: Operations Analysis), often shortened to the initialism OR, is a discipline that deals with the development and application of analytical methods to improve deci ...

from

Stanford University Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. Stanford is consider ...

in 1975. He received his

Ph.D. A Doctor of Philosophy (PhD, Ph.D., or DPhil; Latin: or ') is the most common degree at the highest academic level awarded following a course of study. PhDs are awarded for programs across the whole breadth of academic fields. Because it is ...

from the Graduate School of Business at Stanford in 1978. He moved to the United States in 1976.

Career

He worked as a corporate planner from 1972 until 1974, then was an assistant professor at the Swedish School of Economics and Business Administration from 1978 until 1979. He served as an associate professor at the

Kellogg Graduate School of Management The Kellogg School of Management at Northwestern University (also known as Kellogg) is the business school of Northwestern University, a private research university in Evanston, Illinois. Founded in 1908, Kellogg is one of the oldest and most p ...

Northwestern University Northwestern University is a private research university in Evanston, Illinois. Founded in 1851, Northwestern is the oldest chartered university in Illinois and is ranked among the most prestigious academic institutions in the world. Charte ...

(1979–1983) and as the Edwin J. Beinecke Professor of Management at

Yale University Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wo ...

’s School of Management (1983–1994). Holmström was elected Alumnus of The Year by the University of Helsinki Alumni Association in 2010. He has been on the faculty of M.I.T. since 1994, when he was appointed professor of economics and management at the department of economics and Sloan School of Management. Holmström is particularly well known for his work on principal-agent theory. His work made seminal advances in understanding contracting in the presence of uncertainty. More generally, he has worked on the theory of contracting and incentives especially as applied to the

theory of the firm The theory of the firm consists of a number of economic theories that explain and predict the nature of the firm, company, or corporation, including its existence, behaviour, structure, and relationship to the market. Firms are key drivers in econ ...

, to corporate governance and to liquidity problems in financial crises. He praised the taxpayer-backed bailouts by the US government during the

financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...

and emphasizes the benefits of opacity in the

money market The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less. As short-term securities became a commodity, the money market became a compon ...

. Holmström was elected member of the

Finnish Society of Sciences and Letters The Finnish Society of Sciences and Letters is a Finnish academy for natural sciences, social sciences and humanities. It is known in Latin as Societas Scientiarum Fennica, in Swedish as Finska Vetenskaps-Societeten, and in Finnish as Suomen Tiede ...

in 1992 and an honorary member of the same society in 2016. He is a fellow of the

American Academy of Arts and Sciences The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, and ...

, the

Econometric Society The Econometric Society is an international society of academic economists interested in applying statistical tools to their field. It is an independent organization with no connections to societies of professional mathematicians or statisticians. ...

, the

European Economic Association The European Economic Association (EEA) is a professional academic body which links European economists. It was founded in the mid-1980s. Its first annual congress was in 1986 in Vienna and its first president was Jacques Drèze. The current pres ...

and the

American Finance Association The American Finance Association (AFA) is an academic organization whose focus is the study and promotion of knowledge of financial economics. It was formed in 1939. Its main publication, the ''Journal of Finance'', was first published in 1946. ...

, and a foreign member of the

Royal Swedish Academy of Sciences The Royal Swedish Academy of Sciences ( sv, Kungliga Vetenskapsakademien) is one of the Swedish Royal Academies, royal academies of Sweden. Founded on 2 June 1739, it is an independent, non-governmental scientific organization that takes special ...

and the

Finnish Academy of Science and Letters The Finnish Academy of Science and Letters (Finnish ''Suomalainen Tiedeakatemia''; Latin ''Academia Scientiarum Fennica'') is a Finnish learned society. It was founded in 1908 and is thus the second oldest academy in Finland. The oldest is the Fi ...

. In 2011, he served as President of the Econometric Society. He holds honorary doctorate degrees from the

Stockholm School of Economics The Stockholm School of Economics (SSE; sv, Handelshögskolan i Stockholm, HHS) is a private business school located in city district Vasastaden in the central part of Stockholm, Sweden. SSE offers BSc, MSc and MBA programs, along with ...

, Sweden, the

University of Vaasa The University of Vaasa ( fi, Vaasan yliopisto, sv, Vasa universitet) is a multidisciplinary, business-oriented university in Vaasa, Finland. The campus of the university is situated by the Gulf of Bothnia adjacent to downtown Vaasa. The univ ...

and the

Hanken School of Economics Hanken School of Economics (Swedish: ''Svenska handelshögskolan,'' also known as Hanken) is a business school in Finland with two locations, Helsinki and Vaasa. Founded in 1909, it is the oldest business school in Finland, and one of the oldest ...

in Finland. Holmström was a member of

Nokia Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporatio ...

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...

from 1999 until 2012. He is a member of the Board of the

Aalto University Aalto University ( fi, Aalto-yliopisto; sv, Aalto-universitetet) is a public research university located in Espoo, Finland. It was established in 2010 as a merger of three major Finnish universities: the Helsinki University of Technology, the He ...

.Shor
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publications
from MIT.

Accolades

He was awarded the 2012 Banque de France-TSE Senior Prize in Monetary Economics and Finance, the 2013 Stephen A. Ross Prize in Financial Economics and the 2013 Chicago Mercantile Exchange – MSRI Prize for Innovative Quantitative Applications. In 2016, Holmström won the

Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...

together with Oliver Hart "for their contributions to

contract theory From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties. From an ...

Personal life

He is married to Anneli Holmström with one son.

Publications

*Holmström, Bengt, 1972. "En icke-linear lösningsmetod för allokationsproblem". University of Helsinki. *Holmström, Bengt, 1979. "Moral Hazard and Observability," ''Bell Journal of Economics'', 10(1), pp
74–91
* Holmstrom, Bengt. "Moral hazard in teams." The Bell Journal of Economics (1982): 324–340. * Holmstrom, Bengt. "Equilibrium long-term labor contracts." The Quarterly Journal of Economics (1983): 23–54
23
* Holmström, B., 1999. Managerial incentive problems: A dynamic perspective. The Review of Economic Studies, 66(1), pp. 169–18
169–182
* Holmström, Bengt, and

Paul Milgrom Paul Robert Milgrom (born April 20, 1948) is an American economist. He is the Shirley and Leonard Ely Professor of Humanities and Sciences at Stanford University, the Stanford University School of Humanities and Sciences, a position he has held ...

, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," ''Journal of Law, Economics, and Organization'', 7
24–52
* Holmstrom, B. and Milgrom, P., 1994. The firm as an incentive system. The American Economic Review, pp. 972–991
972–991
* Holmström, Bengt, and

John Roberts John Glover Roberts Jr. (born January 27, 1955) is an American lawyer and jurist who has served as the 17th chief justice of the United States since 2005. Roberts has authored the majority opinion in several landmark cases, including ''Nati ...

, 1998. "The Boundaries of the Firm Revisited," ''Journal of Economic Perspectives'', 12(4), pp
73–94
* Holmström, Bengt, and

Jean Tirole Jean Tirole (born 9 August 1953) is a French professor of economics at Toulouse 1 Capitole University. He focuses on industrial organization, game theory, banking and finance, and economics and psychology. In 2014 he was awarded the Nobel Memori ...

, 1998. "Private and Public Supply of Liquidity," ''Journal of Political Economy'', 106(1), pp
1
��40.

References

External links

* including the Prize Lecture 8 December 2016 ''Pay for Performance and Beyond'' , - {{DEFAULTSORT:Holmstrom, Bengt R. 1949 births Living people Finnish business theorists 20th-century Finnish economists Finnish Nobel laureates Game theorists Information economists Stanford Graduate School of Business alumni Stanford University alumni MIT Sloan School of Management faculty Members of the Royal Swedish Academy of Sciences Fellows of the American Academy of Arts and Sciences Fellows of the Econometric Society Presidents of the Econometric Society Swedish-speaking Finns Nokia people Finnish expatriates in the United States Nobel laureates in Economics 21st-century Finnish economists MIT School of Humanities, Arts, and Social Sciences faculty Nancy L. Schwartz Memorial Lecture speakers Fellows of the European Economic Association