Oliver Hart won the Nobel Memorial Prize in Economic Sciences in 2016 for his work in contract theory, the study of how contracts and incentives influence decision-making and business relationships. Hart sat down with Business Insider’s Sara Silverstein at UBS’s Nobel Perspectives Live event in Brooklyn. Hart talks about the rise of blockchain-based smart contracts. He explains that smart contracts don’t solve the problems of incomplete contracts that his work is focused on. Following is a transcript of the video.
Sara Silverstein: You won the Nobel Prize for your work in contract theory. Can you tell me at all about what you think about smart contracts that we’re seeing now? Are they gonna revolutionize everything? Do they solve all the problems that you were working on?
Oliver Hart: That’s right, they’re gonna take the prize away. It’s all gonna be irrelevant.
I must admit — first, that I know little about smart contracts. I’m trying to understand more about them as I am about bitcoin, blockchain, all the rest. It’s all a bit mysterious. I’m doubtful that it’s going to be a cure-all. I mean, it seems that for some things it could be quite useful ’cause it can automate certain things. And so, you know, if I have some sort of insurance contract which says that if a certain event happens then I’m gonna get paid something, then we can sort of make that automatic so it just comes right into my account. I don’t have to check on anything or call up the insurance company. So, things like that can certainly help but they’re not going to solve — unfortunately the problems I’ve been particularly concerned with are contracts that are written for the long-term and where people are in long-term relationships and economic …read more
Source:: Business Insider