Notes on the Bankruptcy Problem: an Application of Hydraulic Rationing
AbstractWe offer a new approach to the well-known bankruptcy problem based on Kaminski's idea. With the help of hydraulic rationing we give a proof to Aumann and Maschlers theorem i.e. the consistent solution of a bankruptcy problem is the nucleolus of the corresponding game. We use a system of vessels and water and the principles of mechanics to show this fact. The proof is not just simple and demonstrative but also provides an insight how the nucleolus is constructed in such games.
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Bibliographic InfoPaper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 1123.
Length: 18 pages
Date of creation: May 2011
Date of revision:
bankruptcy problem; nucleolus; hydraulic rationing;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
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- Moreno-Ternero, Juan D. & Villar, Antonio, 2004.
"The Talmud rule and the securement of agents' awards,"
Mathematical Social Sciences,
Elsevier, vol. 47(2), pages 245-257, March.
- Juan de Dios Moreno Ternero & Antonio Villar Notario, 2003. "The Talmud Rule And The Securement Of Agents? Awards," Working Papers. Serie AD 2003-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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