A New Approach for Bounding Awards in Bankruptcy Problems

José-Manuel Giménez-Gómez () and M. Carmen Marco Gil

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: The solution for the ‘Contested Garment Problem’, proposed in the Babylonic Talmud, suggests that each agent should receive at least some part of the resources whenever the demand overcomes the available amount. In this context, we propose a new method to define lower bounds on awards, an idea that has underlied the theoretical analysis of bankruptcy problems from its beginning (O’Neill, 1982) to present day (Dominguez and Thomson, 2006). Specifically, starting from the fact that a society establishes its own set of ‘Commonly Accepted Equity Principles’, our proposal ensures to each agent the smallest amount she gets according to all the admissible rules. As in general this new bound will not exhaust the estate, we analyze its recursive application for different sets of equity principles. Keywords: Bankruptcy problems, Bankruptcy rules, Lower bounds, Recursive process

Keywords: Fallida; 33 - Economia (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-gth
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http://hdl.handle.net/2072/182719

Related works:
Journal Article: A new approach for bounding awards in bankruptcy problems (2014)
Working Paper: A New Approach for Bounding Awards in Bankruptcy Problems (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/182719

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