Stephen A. Ross, a Massachusetts Institute of Technology professor whose research and writings helped provide the theoretical foundation for investing tools used throughout the financial industry, died March 3 at his home in Old Lyme, Conn. He was 73.

His death was reported by Ross, Jeffrey & Antle, an investment advisory firm he cofounded in Connecticut. The cause was heart-related.

An author of several textbooks on corporate finance and markets, Professor Ross was best known for developing arbitrage pricing theory in 1976. The concept uses gross domestic product, inflation, investor confidence, and other big-picture data to identify mispriced assets. APT, as it’s called, is widely used among investment managers.

Another groundbreaking contribution, known as agency theory, describes how the interests of shareholders can differ from those who make decisions on their behalf. The idea involves creating incentives to make it more likely that corporate executives make decisions desirable to investors, according to a tribute posted on the website of the California Institute of Technology, where Professor Ross was a senior trustee.

He is also credited with pioneering what is known as the binomial model for pricing stock options and was cocreator of the Cox-Ingersoll-Ross model of pricing government bonds.

“The binomial model literally is used millions of times a day,’’ MIT colleague and Nobel laureate Robert Merton said.

Professor Ross, who was the Franco Modigliani professor of financial economics at MIT and taught finance at the Sloan School of Management, received the Deutsche Bank Prize in Financial Economics in 2015 for creating models that have ‘‘not only profoundly shaped economic theory but also influenced financial practice and policy during the past 25 years,’’ said Juergen Fitschen, then co-chief executive officer at Deutsche Bank.

‘‘Steve Ross will be remembered as an intellectual giant,’’ David Schmittlein, MIT Sloan’s dean, said in a message on the school’s website. ‘‘It is difficult to imagine the discipline of modern finance without Steve’s contributions.’’

An adherent of what is known as neoclassical finance, Professor Ross sought through his work to reinforce the structural integrity of efficient markets, ones with a strong infrastructure of mathematics-based principles that can withstand the predatory schemes and sometimes irrational behaviors of those participating in them.

Professor Ross relished marshaling complex theories honed in the academic world and applying them to Wall Street, where they could be used to address practical problems.

Antoinette Schoar, a Sloan professor and the head of the school’s finance department, said in an interview with The New York Times that “all of Steve’s intellectually intricate finance theories were aimed at solving real-world problems.’’

His models “were both extremely elegant and extremely practical,’’ she added.

“Steve Ross was one of the giants of modern finance with a razor sharp intellect and a heart of gold,’’ Andrew Lo, a professor with the Sloan School, told MIT News. “The cold, hard logic of his mathematical theories stood in sharp contrast to the warmth of his personality. He was more humanist than financial economist and was deeply connected in so many communities that would rightly claim Steve as their own.’’

A Boston native, Stephen Alan Ross received a bachelor’s degree from Caltech, in Pasadena, Calif., in 1965, and a PhD in economics from Harvard University five years later.

Before joining MIT’s faculty in 1997, he spent 13 years as a professor of economics and finance at Yale University. In the 1970s, he taught at the University of Pennsylvania’s Wharton School, in Philadelphia.

In 2006, some of his former students secretly raised money to create the Stephen A. Ross Prize in Financial Economics, which sought to spotlight research that advanced the understanding of markets. The total came to more than $600,000, more than doubling their original fund-raising goal.

MIT Professor Leonid Kogan, a former student and coauthor with Professor Ross and others of “The Price Impact and Survival of Irrational Traders,’’ told MIT News the collection of students advised by Professor Ross was “unmatched in our profession.’’ Kogan credited his colleague with kindling both the ideas and enthusiasm of his students.

In addition to his academic career, Professor Ross helped start several financial companies, including Roll & Ross Asset Management, an equity money manager based in Blue Bell, Pa.

He was chairman of Compensation Valuation Inc., a New Haven consulting firm that determines the value of employee stock options. He also served as an adviser to the US Treasury, the Commerce Department, and the Internal Revenue Service.

Other prizes he received included the Graham and Dodd Award for financial writing in 1984 and Jean-Jacques Laffont Prize given by the Toulouse School of Economics, in 2007.

Professor Ross leaves his wife, the former Carol Frost, a daughter, Katherine, and a son, Jonathan.

The Sloan School is developing plans for services and a celebration of his life.

Material from Bloomberg News and The New York Times was used in this obituary.