Nobel Prize in Economics goes to Academics Who Pay Attention to “What Happens in the Real World” and Contracts

Elinor Ostrom and Oliver Williamson were awarded the Nobel Prize in economics earlier this week.  The WSJ describes both of their work has “highlight[ing] areas where standard approaches of economics are inadequate at explaining what actually occurs.”  Further, the WSJ explains (subscription required):

Mr. Williamson’s work is driven by two key ideas. The first is that a contractual agreement can never be complete; there are always contingencies that haven’t been accounted for. The other is that people act opportunistically within the gray area of contracts to make sure they benefit the most, and that can lead to problems.

Congrats to both economists.

[Meredith R. Miller]