Compromise Solutions for Bankruptcy Situations: A Note

José-Manuel Giménez-Gómez (), António Osório and Josep E. Peris

No 14-2, QM&ET Working Papers from University of Alicante, D. Quantitative Methods and Economic Theory

Abstract: Although classic bankruptcy problems take into account a single claims vector, Pulido et al. (2008) show that there are real bankruptcy situations where agents face more than one reference vector. In particular, they consider the claims and an additional reference vector. To analyze these situations, they propose the extreme and the diagonal approaches. Nonetheless, the former approach depends on the order of the vectors: if we interchange the claims and the reference vectors, the result changes. Moreover their study is limited to the case in which the reference vector is lower than the claims vector. In the present note, we propose an extension that solves these shortcomings by introducing the idea of impartiality.

Keywords: bankruptcy problems; reference point; compromise solution; impartiality (search for similar items in EconPapers)
JEL-codes: C71 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2014-05-20
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:ris:qmetal:2014_002

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