A Proportional Approach to Bankruptcy Problems with a guaranteed minimum
AbstractIn a distribution problem, and specfii cally in bankruptcy issues, the Proportional (P) and the Egalitarian (EA) divisions are two of the most popular ways to resolve the conflict. The Constrained Equal Awards rule (CEA) is introduced in bankruptcy literature to ensure that no agent receives more than her claim, a problem that can arise when using the egalitarian division. We propose an alternative modi cation, by using a convex combination of P and EA. The recursive application of this new rule finishes at the CEA rule. Our solution concept ensures a minimum amount to each agent, and distributes the remaining estate in a proportional way. Keywords: Bankruptcy problems, Proportional rule, Equal Awards, Convex combination of rules, Lorenz dominance. JEL classi fication: C71, D63, D71.
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Bibliographic InfoPaper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/182645.
Date of creation: 2012
Date of revision:
Fallida; Jocs cooperatius; Economia del benestar; Elecció social; 33 - Economia;
Other versions of this item:
- José M. Jiménez Gómez & Josep Enric Peris Ferrando, 2012. "A proportional approach to bankruptcy. Problems with a guaranteed minimum," Working Papers. Serie AD 2012-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- 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.
- 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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