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Progressive Current Accounts: Profit-Sharing Interest

Author

Listed:
  • Salvador Cruz Rambaud

    (Departamento de Dirección y Gestión de Empresas, University of Almería, Spain)

  • María del Carmen Valls Martínez

    (Departamento de Dirección y Gestión de Empresas, University of Almería, Spain)

Abstract

Certain financial investments have different profitabilities according to the invested capital. In particular, there are some bank transactions, such as progressive current accounts, which discriminate nominal rates of interest, depending on the invested sums, that is, transactions whose underlying financial laws are not homogeneous of the first degree with respect to the amounts. More specifically, this discrimination occurs when assigning an equal rate to the capitalsCin the same interval]Ci,Ci+1]. This makes the financial law discontinuous with finite jumps, once the term has been fixed. Of course, it would be convenient, for a group of investors, to join their savings because greater rates of interest can be obtained. The question is how to distribute, in a rational way or with equity, among the individual agents, the interest obtained jointly. Our findings are based on a progressive sharing, using differential calculus.

Suggested Citation

  • Salvador Cruz Rambaud & María del Carmen Valls Martínez, 2003. "Progressive Current Accounts: Profit-Sharing Interest," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 139-149.
    • Handle: RePEc:wsi:igtrxx:v:05:y:2003:i:02:n:s0219198903000945
    DOI: 10.1142/S0219198903000945
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    References listed on IDEAS

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    1. Mary A. Dimand & Robert W. Dimand (ed.), 1997. "The Foundations of Game Theory," Books, Edward Elgar Publishing, volume 0, number 909.
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    More about this item

    Keywords

    Financial law; progressive current account; profit-sharing; non-homogeneous; sub-additive;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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