Equivalence of Axioms for Bankruptcy Problems

Youngsub Chun

Working Paper Series from Institute of Economic Research, Seoul National University

Abstract: The bankruptcy problem is concerned with how to divide the net worth of the bankrupt firm among its creditors. In this paper, we investigate the logical relations between various axioms in the context of bankruptcy. Those axioms are: population-and-resource monotonicity, consistency, converse consistency, agreement, and separability. In most axiomatic models, they are not directly related. However, we show that they are equivalent on the class of bankruptcy problems under minor additional requiremnets.

JEL-codes: D63 D70 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin and nep-mic
Date: Written 1999-01
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