Massachusetts Institute of Technology · CC BY-SA 4.0

Merton shared the 1997 Nobel Memorial Prize in Economic Sciences with Myron Scholes for extending the Black-Scholes option-pricing model into continuous-time finance, giving markets a rigorous method for valuing derivative securities that reshaped modern financial theory and practice. He served on the board of Long-Term Capital Management, the hedge fund whose 1998 collapse required a Federal Reserve-brokered bailout — a sobering coda to theoretical work that had seemed to tame financial risk. He continues to research retirement funding and systemic risk at MIT.