Photo from the Nobel Foundation archive.
Robert C. Merton
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1997
Born: 31 July 1944, New York, NY, USA
Affiliation at the time of the award: Harvard University, Cambridge, MA, USA
Prize motivation: "for a new method to determine the value of derivatives."
Contribution: Had a direct influence on the development of the Black-Scholes formula and generalized it in important ways. By devising another way of deriving the formula, he applied it to other financial instruments, such as mortgages and student loans. The work generated new financial instruments and has facilitated more effective risk management in society.
Prize share: 1/2