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The Three Musketeers: Four Classical Solutions To Bankruptcy Problems

Author

Listed:
  • Antonio Villar Notario

    (Instituto Valenciano de Investigaciones Económicas)

  • Carmen Herrero Blanco

    (Instituto Valenciano de Investigaciones Económicas)

Abstract

This paper provides a comparative analysis of some classical solutions to bankruptcy problems from an axiomatic viewpoint. These rules are the constrained equal-awards rule, the constrained equal-losses rule, the proportional rule and the Talmud rule. The purpose of this study is to facilitate the understanding of their differences and to clarify the type of situations in which each of these rules is better.

Suggested Citation

  • Antonio Villar Notario & Carmen Herrero Blanco, 2000. "The Three Musketeers: Four Classical Solutions To Bankruptcy Problems," Working Papers. Serie AD 2000-23, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2000-23
    as

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    References listed on IDEAS

    as
    1. Chun, Youngsub, 1988. "The proportional solution for rights problems," Mathematical Social Sciences, Elsevier, vol. 15(3), pages 231-246, June.
    2. Youngsub Chun, 1999. "Equivalence of Axioms for Bankruptcy Problems," Working Paper Series no1, Institute of Economic Research, Seoul National University.
    3. Chun, Youngsub, 1988. "The equal-loss principle for bargaining problems," Economics Letters, Elsevier, vol. 26(2), pages 103-106.
    4. Dagan, Nir & Serrano, Roberto & Volij, Oscar, 1997. "A Noncooperative View of Consistent Bankruptcy Rules," Games and Economic Behavior, Elsevier, vol. 18(1), pages 55-72, January.
    5. Herrero, Carmen & Marco, Maria Carmen, 1993. "Rational equal-loss solutions for bargaining problems," Mathematical Social Sciences, Elsevier, vol. 26(3), pages 273-286, November.
    6. Dagan, Nir & Volij, Oscar, 1993. "The bankruptcy problem: a cooperative bargaining approach," Mathematical Social Sciences, Elsevier, vol. 26(3), pages 287-297, November.
    7. Carmen Herrero & Antonio Villar, 2002. "Sustainability in bankruptcy problems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 10(2), pages 261-273, December.
    8. Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, vol. 44(2), pages 321-335, April.
    9. Nir Dagan, 1996. "New characterizations of old bankruptcy rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(1), pages 51-59, January.
    10. Hervé Moulin, 2000. "Priority Rules and Other Asymmetric Rationing Methods," Econometrica, Econometric Society, vol. 68(3), pages 643-684, May.
    11. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    12. Youngsub Chun, 1999. "Equivalence of axioms for bankruptcy problems," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(4), pages 511-520.
    13. O'Neill, Barry, 1982. "A problem of rights arbitration from the Talmud," Mathematical Social Sciences, Elsevier, vol. 2(4), pages 345-371, June.
    14. Herrero, Carmen & Maschler, Michael & Villar, Antonio, 1999. "Individual rights and collective responsibility: the rights-egalitarian solution," Mathematical Social Sciences, Elsevier, vol. 37(1), pages 59-77, January.
    15. Mill, John Stuart, 1859. "On Liberty," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number mill1859.
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    More about this item

    Keywords

    Bankruptcy problems; proportional solution; equal-awards solution;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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