On the Existence of Consistent Rules to Adjudicate Conflicting Claims: A Constructive Geometric Approach

William Thomson

No 528, RCER Working Papers from University of Rochester - Center for Economic Research (RCER)

Abstract: For the problem of adjudicating conflicting claims, a rule is consistent if the choice it makes for each problem is always in agreement with the choice it makes for each "reduced problem" obtained by imagining that some claimants leave with their awards and reassessing the situation from the viewpoint of the remaining claimants. We develop a general technique to determine whether a given two-claimant rule admits a consistent extension to general populations, and to identify this extension if it exists. We apply the technique to a succession of examples. One application is to a one-parameter family of rules that offer a compromise between the constrained equal awards and constrained equal losses rules. We show that a consistent extension of such a rule exists only if all the weight is placed on the former or all the weight is placed on the latter. Another application is to a family of rules that provide a compromise between the constrained equal awards and proportional rules, and a dual family that provide a compromise between the constrained equal losses and proportional rules. In each case, we identify the restrictions implied by consistency.

Keywords: claims problems; consistent extensions; proportional rule; constrained equal awards rule; constrained equal losses rule. (search for similar items in EconPapers)
JEL-codes: C79 D63 D74 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2006-04
New Economics Papers: this item is included in nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: On the existence of consistent rules to adjudicate conflicting claims: a constructive geometric approach (2007)
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