Robert C. Merton
Nobel Laureate in Economic Sciences 1997
John and Natty McArthur University Professor, Harvard Business School, Harvard University, USA
Co-reason for the prize:
for developing a new method to determine the value of derivatives
Merton, the John and Natty McArthur University Professor at the Harvard Business School, won the Alfred Nobel Memorial Prize in Economic Sciences in 1997 “for developing a new method to determine the value of derivatives”. He shares the award with Professor Myron S. Scholes. The formula was developed by Professor Scholes with the late Professor Fischer Black and first published in the Journal of Political Economy in May 1973. The formula was further developed by Professor Merton who showed its broad applicability. The Black-Scholes options pricing model has become the benchmark formula for the valuation of stock options. After receiving a Ph.D. in Economics from Massachusetts Institute of Technology in 1970, he served on the finance faculty of MIT’s Sloan School of Management until 1988 when he moved to Harvard.
From 1988-1992, Merton served as a senior advisor to the Office of the Chairman, Salomon Inc. In 1993, he co-founded Long-Term Capital Management and served as a principal until 1999.
From 1999-2001, he was a senior advisor to J.P. Morgan & Company. Merton is past president of the American Finance Association and a member of the National Academy of Sciences, the Advisory Board, North Holland Series of Handbooks in Finance, International Board of Scientific Advisers, Tinbergen Institute, Advisory Board, Brookings.
He had honorary degrees from Harvard University, Chicago, Paris, Lausanne e Sun Yat-sen.