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Updating claims in bankruptcy problems

Author

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  • Albizuri, M.J.
  • Leroux, J.
  • Zarzuelo, J.M.

Abstract

We re-examine the consistency axiom in bankruptcy problems and propose arguments in favor of an alternative definition of a reduced problem. The classical definition updates the size of the estate while keeping agents' claims unaffected. Instead, we suggest updating agents' claims along with the estate. The resulting consistency axiom characterizes the well-known Random Arrival rule as the unique bilateral consistent extension of the Contested Garment rule to many agents.

Suggested Citation

  • Albizuri, M.J. & Leroux, J. & Zarzuelo, J.M., 2010. "Updating claims in bankruptcy problems," Mathematical Social Sciences, Elsevier, vol. 60(2), pages 144-148, September.
    • Handle: RePEc:eee:matsoc:v:60:y:2010:i:2:p:144-148
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    Cited by:

    1. Yan-an Hwang & Tsung-fu Wang, 2009. "Population monotonicity, consistency and the random arrival rule," Economics Bulletin, AccessEcon, vol. 29(4), pages 2816-2821.
    2. Gong, Doudou & Dietzenbacher, Bas & Peters, Hans, 2022. "A random arrival rule for NTU-bankruptcy problems," Economics Letters, Elsevier, vol. 218(C).
    3. Morgenstern, Ilan & Domínguez, Diego, 2019. "A characterization of the random arrival rule for bankruptcy problems," Economics Letters, Elsevier, vol. 174(C), pages 214-217.
    4. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
    5. M. Albizuri & J. Echarri & J. Zarzuelo, 2015. "A non-cooperative mechanism for the Shapley value of airport problems," Annals of Operations Research, Springer, vol. 235(1), pages 1-11, December.

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    More about this item

    Keywords

    Bankruptcy problems Consistency Cooperative games;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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