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On manipulability in financial systems

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  • Calleja, Pedro
  • Llerena, Francesc
  • Sudhölter, Peter

Abstract

We investigate manipulability in the setting of financial systems by considering two weak forms of immunity: non-manipulability via merging and non- manipulability via splitting. Not surprinsingly, non-manipulability via splitting is incompatible with some basic axioms: claim boundedness, limited liability, and absolute priority. Outstandingly, we introduce a large class of financial rules that are immune to manipulations via merging. This class includes the proportional financial rule but also financial rules in accordance with parametric bankruptcy rules fulfilling non-manipulability via merging. Keywords: financial systems, manipulability via merging, manipulability via splitting, parametric bankruptcy rules JEL: C71

Suggested Citation

  • Calleja, Pedro & Llerena, Francesc & Sudhölter, Peter, 2021. "On manipulability in financial systems," Working Papers 2072/534916, Universitat Rovira i Virgili, Department of Economics.
    • Handle: RePEc:urv:wpaper:2072/534916
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    Cited by:

    1. Pedro Calleja & Francesc Llerena, 2023. "Proportional clearing mechanisms in financial systems: an axiomatic approach," UB School of Economics Working Papers 2023/442, University of Barcelona School of Economics.
    2. Calleja, Pedro & Llerena, Francesc & Sudhölter, Peter, 2023. "Remarks on solidarity in bankruptcy problems when agents merge or split," Mathematical Social Sciences, Elsevier, vol. 125(C), pages 61-64.

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    More about this item

    Keywords

    Entitats financeres; 336 - Finances. Banca. Moneda. Borsa;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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