Robert C. Merton

Robert Cox Merton (born July 31, 1944) is an American economist, Nobel Memorial Prize in Economic Sciences laureate, and professor at the MIT Sloan School of Management. He is best known for his pioneering contributions to continuous-time finance, particularly the first continuous-time option pricing model, the Black–Scholes–Merton model. Born in New York City to sociologist Robert K. Merton and Suzanne Carhart, he grew up in Hastings-on-Hudson, New York. Merton earned a B.S. in engineering mathematics from Columbia University, an M.S. from the California Institute of Technology, and a Ph.D. in economics from MIT in 1970 under Paul Samuelson. He joined the MIT Sloan faculty in 1970, teaching there until 1988, then moved to Harvard University, where he served as George Fisher Baker Professor of Business Administration (1988–1998) and John and Natty McArthur University Professor (1998–2010), becoming professor emeritus in 2010. He rejoined MIT Sloan in 2010 as School of Management Distinguished Professor of Finance and also became a Resident Scientist at Dimensional Fund Advisors. In 1997, Merton and Myron Scholes were jointly awarded the Nobel Memorial Prize in Economic Sciences for developing a method to value derivative securities. He served on the board of Long-Term Capital Management (LTCM), a highly leveraged hedge fund that collapsed in 1998, losing most investor value and requiring a $3.6 billion bailout from 14 banks brokered by the Federal Reserve Bank of New York. His current research focuses on lifecycle investing, retirement funding, systemic risk in macrofinance, and financial innovation. Merton is past President of the American Finance Association (1986), a member of the National Academy of Sciences (1993), and a fellow of the American Academy of Arts and Sciences. He remained on the MIT faculty in 2021.