U.S. economist Stephen Ross was named winner of the Deutsche Bank Prize in Financial Economics on Tuesday for helping to create models that have helped markets assess prices for options and other assets for the past three decades.
The MIT professor and popular textbook author has developed concepts widely applied in the economics of uncertainty, corporate finance and decision theory.
"Ross's models have changed and advanced economic practice profoundly," said the Frankfurt-based Center for Financial Studies that awards the $50,000 prize once every two years.
"His theories provide standards for pricing in major securities trading firms, useful for retirement accounts and for new financial products that may allow households to insure a wider range of risks," research institute CFS said.
The prize honors researchers whose work has influenced financial economics and macroeconomics. The prize was awarded for the first time in 2005 to University of Chicago professor Eugene Fama, who went on to share the Nobel Prize for economics in 2013.
The last recipient, in 2013, was Raghuram Rajan, governor of the Reserve Bank of India and former chief economist at the International Monetary Fund.
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