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Notes on the Bankruptcy Problem: an Application of Hydraulic Rationing

Author

Listed:
  • Tamas Fleiner

    (Budapest University of Economics and Technology - Department of Computer Science and Information Theory)

  • Balazs Sziklai

    (Institute of Economics - Hungarian Academy of Sciences)

Abstract

We 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.

Suggested Citation

  • Tamas Fleiner & Balazs Sziklai, 2011. "Notes on the Bankruptcy Problem: an Application of Hydraulic Rationing," CERS-IE WORKING PAPERS 1123, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1123
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    File URL: http://econ.core.hu/file/download/mtdp/MTDP1123.pdf
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    References listed on IDEAS

    as
    1. 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.
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    Cited by:

    1. Biró, Péter, 2011. "A társadalmi döntések számítástudománya - egy új határterület. European Future Technologies Conference and Exhibition (FET'11) COMSOC (Computational Social Choice) szekció MTA Közgazdaságtudományi Int," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 709-715.
    2. Isaac Elishakoff & Avraham N. Dancygier, 2023. "An explicit solution to a game-theoretic bankruptcy problem," SN Business & Economics, Springer, vol. 3(9), pages 1-16, September.

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    More about this item

    Keywords

    bankruptcy problem; nucleolus; hydraulic rationing;
    All these keywords.

    JEL classification:

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

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