Myron S. Scholes
Nobel Laureate in Economic Sciences 1997
Professor Emeritus of Finance, Graduate Business School, Stanford University, USA
Co-reason for the prize:
for developing a new method to determine the value of derivatives
Professor Scholes, the Frank E. Buck Professor, Emeritus at the Stanford University Graduate School of Business, was awarded, together with Professor Robert Merton, the Nobel Prize “for developing a new method to determine the value of derivatives”. 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. Today thousands of investors and traders use the formula every day to value stock options in markets around the world.
He was on the faculty of the Stanford Graduate School of Business from 1983 to 1996 and was also a Professor of Law at the Stanford Law School. Prior to that, he was a Faculty Member at MIT and at the University of Chicago.
In 1992, while still at Stanford, Professor Scholes was named a Managing Director of Salomon Brothers and then Co-head of its fixed-income derivative sales and trading department. Professor Scholes joined with several colleagues, many from Salomon Brothers, to become a Principal and Co-founder of a firm called Long-Term Capital Management
By applying financial technology to practice, Professor Scholes has achieved a better understanding of the evolution of financial institutions and markets, and the forces shaping this evolution on a global basis. The research papers in the last few years have focused on the interaction and evolution of markets and financial institutions.
Professor Scholes received honorary doctorate degrees from: University of Paris-Dauphine, McMaster University, and Katholieke Universiteit Leuven.