STOCKHOLM, October 10. /TASS/. UK-born and Finland-born Bengt scientists won the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for "their contributions to contract theory", the Royal Swedish Academy of Sciences said on Monday.

The prize worth 8 million Swedish crowns ($933,000) will be shared between Oliver Hart (Harvard University) and Bengt Holmstrom (Massachusetts Institute of Technology).

"The new theoretical tools created by Hart and Holmstrom are valuable to the understanding of real-life contracts and institutions, as well as potential pitfalls in contract design," the academy said in a statement.

"This year’s laureates have developed contract theory, a comprehensive framework for analyzing many diverse issues in contractual design, like performance-based pay for top executives, deductibles and co-pays in insurance, and the privatization of public-sector activities," the academy said.

The economics prize was established by Sweden's central bank in 1968.