A proportional approach to bankruptcy. Problems with a guaranteed minimum
AbstractIn a distribution problem, and specifically in bankruptcy issues, the Proportional (P) and theEgalitarian (EA) divisions are two of the most popular ways to resolve the conflict. TheConstrained Equal Awards rule (CEA) is introduced in bankruptcy literature to ensure that noagent receives more than her claim, a problem that can arise when using the egalitarian division.We propose an alternative modification, by using a convex combination of P and EA. Therecursive application of this new rule finishes at the CEA rule. Our proposal ensures a minimumamount to each agent, and distributes the remaining estate in a proportional way.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2012-11.
Length: 24 pages
Date of creation: Apr 2012
Date of revision:
Publication status: Published by Ivie
Bankruptcy problems; Proportional rule; Equal Awards; Convex combination of rules; Lorenz dominance.;
Other versions of this item:
- Peris, Josep E. & Jiménez-Gómez, José M., 2012. "A Proportional Approach to Bankruptcy Problems with a guaranteed minimum," QM&ET Working Papers 12-7, Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica.
- Giménez-Gómez, José Manuel & Peris, Josep E., 2012. "A Proportional Approach to Bankruptcy Problems with a guaranteed minimum," Working Papers 2072/182645, Universitat Rovira i Virgili, Department of Economics.
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
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