Bengt Holmstrom

Bengt Holmström is a Finnish economist renowned for his work in contract theory, which explores how contracts can create incentives and influence behavior within organizations. He won the Nobel Prize in Economic Sciences in 2016 for his insights into the design of contracts, particularly in relation to performance-based pay and how it affects decision-making. His research helps to understand the balance between risk and reward in business and economic systems, guiding how firms structure compensation and organize tasks to align the interests of employers and employees effectively. His contributions have significant implications in economics, business, and management.