Robert C. Merton
Robert C. Merton
Robert Cox Mertonis an American economist, Nobel laureate in Economics, and professor at the MIT Sloan School of Management, known for his pioneering contributions to continuous-time finance, especially the first continuous-time option pricing model, the Black–Scholes formula...
NationalityAmerican
ProfessionEconomist
Date of Birth31 July 1944
CountryUnited States of America
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In college I started studying the stock market. I went down to the stock exchange, watched all the activity from the visitors' gallery, people running around, calling numbers, shouting, and all the paper flying and the bells ringing, and of course that was exciting, and it seemed to lend itself to my analytical skills.
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I think in the case of my father, in terms of the things that influenced me, he never pressed me to go into academics or pressed me to go to a field, and indeed, my behavior was largely to move as far the other direction. I don't think that's uncommon with people with very successful parents.
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My principal contribution to the Black-Scholes option-pricing theory was to show that the dynamic trading strategy prescribed by Black and Scholes to offset the risk exposure of an option would provide a perfect hedge in the limit of continuous trading.
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As it happens, although I was at MIT on the faculty full-time for 18 years and then at Harvard for another 16, so I've always been in full-time academia, I always found it was both beneficial for my research and beneficial for the other work to be involved in the practicing community.
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School work and intellectual interests such as music and the arts were not especially important to me while I was growing up, although mathematics, my favorite subject, was fun. Baseball was my first passion: I played sand lot and Little League and rooted for the Brooklyn Dodgers.
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As an undergraduate at Columbia, I went to the engineering school. I had a great deal of training in engineering and mathematics as well as subdiversified training. And then I went to the California Institute of Technology to do my Ph.D. in applied math.