and bengt holmstrom for their contributions to contract theory. >> oliver hart was born in englandw professor at harvard university. bengt holmstrom is from finland. he's a professor at massachusetts institute of technology. the royal swedish academy of sciences awarded the prize to the two professors for developing contract theory, a general framework for understanding how contracts work. in the 1970s, holmstrom showed how a principals such as company shareholders should design a contract for an agent such as the ceo. he explained how the contract should link the agent's pay to performance. in the 1980s, hart made a major contribution to the understanding of incomplete contracts. these are contracts that don't cover every possibility in a legal relationship. the academy says the professors laid the foundation for designing policies and institutions in many areas from bankruptcy legislation to political constitutions. >>> autumn is the season when the arts schedule in japan gets busy after a long, hot summer. two events brought artists and audiences from around the world together.

royal swedish academy of sciences has decided to open or -- award the economic prize for 2016 to oliver hart and bengt holmstrom for their contributions to contract theory. >> a moment economists have dreamed of. both in the u.s.. they have scooped the most prestigious award in their field. bengt holmstrom thanked the committee by phone. >> i am grateful. >> contract theory affects us all. together, they laid the foundation for better design deals. their work goes further than that. theory looks at when not to increase salaries and considers whether it pays off in the long run. >> this is a very fundamental theory to understand contracts. contracts are central to get different people to walk rate. when you want two people, you need to make sure they work in the same direction and are happy with the outcome. that is what contract theory is about. signing a contract might be commonplace. there is a science to that as this noble prize goes to show. >> we're talking about a big multibillion euro contract. one says greece has done everything. it will get that money right away with more to come at

oliver hart is a british economist --teaching at harvard university. and bengt holmstrom is a finnish economist -- teaching at m-i-t. holmstrom researched employment contracts... including those between c-e-os and the extraordinary high salaries paid to c-e- o's. and hart's research looked at whether providers of public services should be publicly or privately owned... with a particular concern about privately run prisons. toss to weather weather increasing clouds tonight with temperatures falling through the possible overnight with a low in the middle 50s. mostly cloudy tuesday with scattered showers and a high around 70. we have a better chance for showers and thunderstorms wednesday as a cold front crosses. highs will drop into the 50s thursday. scattered showers overnight. low: 54 dewpoint: 49 wind: se 5-10 mph tuesday: a mix of sun and clouds, with a few scattered showers. high: 70 dewpoint: 51 wind: s 5-15 mph wednesday:mostly cloudy with showers & t-storms likely. wind: sw/nw 5-15 mph thursday: mostly sunny and cool. patchy morning frost. am low

professors bengt holmstrom of mit and oliver hart of harvard are sharing the 2016 nobel prize in economics. they won for their contribution to contract theory which helps to shape executive pay. hart is the 48th harvard faculty member awarded the nobel prize. holmstrom is the 5th person from mit's economics department to win. because people talks a much about them. one does not really expect it in some ways. maria: both men have taught at their respective schools since the early 1990's. ed: let's take you to made in massachusetts. some of the best gouda you can buy, is made right here in mass. tonight, doug meehan takes us to the company churning out that cheese for decades. doug: when it comes to good gouda at smith's country cheese in winchendon they believe and it all starts with the ladies out back. >> we get the milk at from the 4 a.m. cows that day, it pops right up to this room, vat, and it's fresh. allie catlin hasn't always been doug up to her elbows in curds : and whey. just year ago she was working in first thought. doug: but 11 months ago she and her husband decided to get into

harvard's oliver hart and m.i.t.'s bengt holmstrom were given the award this morning for their contributions to contract theory. specifically, the pair shed new light on how business contracts help people deal with conflicts of ies >> the 40th annual tufts health plan 10k for women is underway. live sky 5 over the course of the race kicking off just minutes ago at the beacon street start. thousands of women are competing for the usa track and field official 10k championship title. great crew there. >> a great day for. >> totally. not too hot or cold. it's do or die for the red sox no one there is ready for winter, that's for sure. but, like it or not, the red sox are on the brink of elimination today. away we go. clay buckhholz gets the ball for the sox. game time, 6:08. also keep in mind, this could be -- could be big papi's final game at fenway. so you can bet the team will have that in mind as they try to keep their pennant hopes alive. rain forced the mlb to call yesterday's game against the indians. only action o

top prize economics going to xo 2 cloak pro feste taking home the honors are oliver hart of had varied. he thanked people for their support but explaining his work would be too complicated. >> i don't think you want to hear what my work, those who understand what i say know it already know i don't understand won't wiser if ooi tell it. it must be something great. meantime hart and his wife say congratulations when the news came down. >> quite impressive coming up on 7 news born to run bruce springsteen goes from rocking stage to causing a frenzy in cambridge. why did he decide to take this trip to harvard? plus praid boos. we'll break it all down coming up on 7 sports. tonight, cheryl fiandaca exclusive. gloucester former police chief caught up in a >> do you think you did anything wrong? >> so what does he have to say about it? he's only te woman 1 : uh, probably post a pic. woman 2: text a friend. interviewer: how about register to vote? man: really? galvin: you can. five minutes online and a massachusetts driver's license is all it takes to register so you can vote for our next pres

the british-born oliver hart from hartford, and bengt holmstrom from m.i.t..heir work is basically about balancing the means and the man's of the people of an organization who agreed to a contract. their research touches on issues that are very topical at the moment. has looked at privatization. holmstrom looks at executive pay, talking about how much those who work in teams should be paid and when they should be promoted. we will go to people trying to get away from such structures. that is the case in india, where young people are feeling a tax that are fueling a startup boom. a -- are feeling fueling a startup boom. with a number of startups, co-working spaces have sprung up across delhi and bangalore. >> this is a lively bar in new delhi. at night, it is packed with partygoers, drinking, and dancing. by day, it is transformed. the atmosphere much more productive if not necessarily much more button-down. of the new delhi's burgeoning co-working spaces. again, it is a millennial personality. people do not want to bow to random bosses in their offices. seen -

. >>> new out this morning, oliver hart won the nobel memorial prize in economic sciences.we say it that way? because alfred nobel didn't set up a prize, so it is given by a different group. but a lot of nobel lawyers in economics. and it is such an inprecise science that one can say up is up and one says up is down and and they both win. the royal swedish academy of sciences says they are vulnerable to the real-life contracts and institutions as well as potential pitfalls in contract design. >>> finally -- >> we'll have a 45-minute segment just on what their work is. >> you're going to host a google hangout. >> that's a good idea. i'm going to host a google hangout. >>> before we head to break, we'll take a quick check on the u.s. equity markets. they are in the green in a big way. the dow opens 70 points higher, the nasdaq up 20 and the s&p 500 up nearly 10 points. and take a look at the price of crude, wti bouncing off the lows of the session after the energy minister said it's not unthinkable that oil gets up to $60 a barrel this year. we are almost at $50. >>> coming u

oliver hart and bank ahlstrom were awarded the 2016 nobel prize in economics for the contribution to contract theory. the world swedish academy made the announcement later today. newacademy says that theoretical tools created by the men are valuable to the understanding of the life contracts and institutions as well as potential pitfalls and contract design. global news 24 hours a day, powered by 2400 journalists, in more than 150 news bureaus across the world. this is bloomberg. vonnie: thank you. now to that intense u.s. presidential debate. 90 minutes, hillary clinton and donald trump sparred over tapes, terrorism, taxes and other hot topics. >> you bragging sexually assaulted women. do you understand that? >> i don't think you understood what was said. this was locker room talk. i will not proud of it. to my family and american people. ms. clinton: it is not only women with this video that raises questions about his fitness to be our president. because he has also targeted immigrants, african-americans, latinos, people with disabilities, pows, muslims, and so many others. so this

. >> the professor won the prize along with british born oliver hart for work in contract theory. >> of course, yes. >> helping individuals and organizations better assess whether their deals are really in their best interests. >> yes, yes. i studied that very well. >> and, yet, the simpson's knew it would happen. >> six years ago. >> they also predicted who will win the presidency on -- >> really? >> yes. >> who's that? >> well, you know, we won't get into it. >> oh, i see. >> yeah. >> finally, why a few celebrity men are sporting nail polish. >> chris hemsworth nominated his brother, liam, and zach efro in to flaunt a painted nail for charity. >> it supports the end of violence against children, and the three shared pictures of themselves showing a single >> the movement is gaining momentum with celebrities from other countries also getting in on the act. they are only doing one finger. you recall last month, we did the story about how men are getting into the nail polish thing. >> the manicure. >> the manicure. putting the man into the cure. >> no. >> took a week. >> no french thi

. >> heather: >> julie: oliver hart lying in bed wandering if chance of winning was gone when phone range with the good news. the pair will now split nearly arrested 22-year-old after he escaped from police after search of his apartment and police say they found explosives and investigators say they arrested alba car after throw people saw his face on wanted post and her called police. >> heather: calling on public to cash whoever opened fire during a party in roxbury hitting a nine-year-old girl with the gun fire. this morning the little girl remains hospitalized but is police told the herald there's concern though that she could be paralyzed. the herald also reporting two people were caught on camera approaching the party where it happens. boston police hope now that witnesses and the video helps catch whoever is responsible. >> julie: it has been two months since vanessa marcotte was attacked and killed in afternoon jog in princeton. signs still stand in the town pleading for answers from anyone who might have information. about the murder but little information about the case that has

oliver hart and mit's bengt holmst w this morning for their contributions to contract theory. specifically the pair she'd light on how business contracts help people deal with conflicts of interest, and also breaking, the navy confirming two missiles were fired towards an american destroyer in the persian gulf. they were fired from territory held by shi'ite rebels in yemen. the missiles landed in the water before getting near the uss mason. it comes after the united arab emirates was targeted days ago from that same region. a 22-year-old syrian man at the center of a nation-wide manhunt. he is believed to have been planning a bomb attack. the suspect had escaped police on saturday during a raid of his apartment where several hundred grams of volatile explosives were found. erika: the suspect accused of killing two police officers this is palm springs, california, behind bars now. police say john felix will be arraigned tomorrow. he was heavily armed when arrested yesterday after a 12-hour standoff. they say that officers during a disturbance call. officers jose vega and leslie

oliver hart of harvard and another awe for from m.i.t. have been awarded a prize for their work on contract theory. hart says he was lying in bed, wondering if his chance was gone, suddenly his phone rang with good news at the other end. holmstrom aid he's overwhelmed. >> i'm wondering if i would wake great and real. >> the reporter: holmstrom says he feels luck plays a big role and he was lucky to work with amazing minds in the project. the pair will now split the nearly $1 million prize. >> vanessa: one of india's largest colleges is expanding into the u.s., but the plans are sparking controversy here in massachusetts. a university has proposed buying the for-profit new england institute of art but attorney general maura healey asked state officials to block the sale, saying he the u.s. and the troubled art institute should close. amity recently bought a branch campus of st. john's university in new york. as clancey i can new england chill is welcome feeling for our neighbors in vermont. >> mark: give awe peek at this just a few minutes

oliver hart of harvard university and bengt holmstrom of massachusetts institute of technology were honored for their work in contract theory. in stockholm today, the nobel committee said they've shed light on everything from paying executives to privatizing prisons. >> thanks to their research we now have, can analyze not just financial terms, who should get paid what, but also the control and decision rights: ownership, property rights and other types of decision rights and contracts. >> sreenivasan: hart was born in britain and has taught at harvard since 1993. holmstrom is from finland. on wall street today, stocks rose as the price of oil topped $51 a barrel-- the highest in a year. the dow jones industrial average gained 88 points to close at 18,329. the nasdaq rose 36 points, and the s&p 500 added nearly 10. still to come on the newshour: the g.o.p. divide after last night's fiery presidential debate. in florida, what hurrican3 matthew has left in its wake. justice ruth bader ginsberg's newest book "my own words," and much more. >> sreenivasan: we return to the race for the white hou

oliver hart and thing hallstrom -- and thing hallstrom -- and holmstroem awarded the nobel prize in economicsurs a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am taylor riggs. this is bloomberg. francine? tom? tom: thanks so much. it is an economics that all of us knows, the idea of my toy policy. holmstroem and bengt -- this is about the micro-foundations, the microeconomics of everything we do every day pretty it is a different world. >> it is a whole different world. macroeconomics is based on micro . it takes a buildup of micro to get to macro. i think that also this maybe suggests the fate of the world in the economic theory right now, that the macro world is really struggling with the whole foundation and how the economies are operating. part of this is the idea of contract theory principle in agent, and that goes to central banks where janet yellen really cannot control her story as a principle of the macro economic debate. talked aboutve this before. i think central banks are struggling against limitations of what they can achieve all over the

oliver hart from harvard and bank holmstrom sharing this prize. the officials say the scholars helped shed light on how contracts help people deal with conflicting interests. >> christa: all right. tom brady is back in a big way. brady and the team showing no signs of trouble, taking down the browns yesterday. the browns defense simply not enough and unleash gronk. brady and his secret weapon back in action, pushing the tight end to his max and coming up big with two catches in the game. general cuoco live in cleveland with more. good morning, john. >> john: good morning, christa. he may have missed a month, but tom brady didn't miss a step yesterday, leading the team on three touchdown drives against the browns. brady was in mid-season form yesterday, finishing with 406 yards and three touchdown passes as the patriots had no problem beating the browns here in cleveland. pats won 33-13. brady connected with seven different receivers yesterday, tight ends rob gronkowski and marty b, a.k.a. martellus bennett. beth had great games. bennett caught all

theoretical tools created by oliver hart and bank. of m.i.t.al life contract and institutions, as well as potential pitfall and contract design. dayal news 24 hours a powered by more than 26 hundred journalists and analysts in more than 120 countries. this is bloomberg. vonnie: the second presidential debate is in the books. is the latestn backing away from the trump campaign. he does stop short of resending endorsements. more on this and the latest debate polls. vonnie: this is bloomberg "markets." i am vonnie quinn. last night's debate between donald trump and hillary clinton proved contentious at times. here they traded jabs of the clinton e-mail controversy. >> lives have been destroyed for doing one fit of what you have done, and it is a disgrace. >> everything he just said is absolutely false, but i am not surprised. it is awfully good with the blasts that someone with the temperament of donald trump is not in charge of the law of our country. next week as you would be in jail. the seniortoday, economic adviser to the trump campaign said