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Why people reach intermediate agreements? Axiomatic and strategic justifications

Author

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  • José M. Jiménez Gómez

    (Universidad Politécnica de Cartagena)

Abstract

As Roemer (1986) points out, things become more interesting once we include information. In this paper, following the line started by Jiménez-Gómez and Marco-Gil (2008), we define both a lower and an upper bounds on awards in the framework of the Lorenz-Bifocal Bankruptcy Problem (Gadea et al. (2010)), which is an extended bankruptcy problem enriched with a Commonly Accepted Equity Principles set and the idea of treat everybody as evenly as possible (Dutta and Ray (1989) and Arin (2007), among others). Moreover, we contribute with the definition of the Lorenz Double Boundedness Recursive procedure, which consists on the recursive imposition of both bounds, providing a natural way of justifying the convex combination of bankruptcy rules. Specifically, we retrieve the midpoint of extreme and opposite well known ways of distributing the resource. Finally, we complete our analysis from the strategic viewpoint, obtaining similar results.

Suggested Citation

  • José M. Jiménez Gómez, 2010. "Why people reach intermediate agreements? Axiomatic and strategic justifications," Working Papers. Serie AD 2010-29, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2010-29
    as

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    References listed on IDEAS

    as
    1. William Thomson, 2012. "Lorenz rankings of rules for the adjudication of conflicting claims," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(3), pages 547-569, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bankruptcy problems; lower bound; upper bound; duality; recursivity;
    All these keywords.

    JEL classification:

    • 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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