Why and how to differentiate in claims problems? An axiomatic approach

José-Manuel Giménez-Gómez () and Antonio Osório

European Journal of Operational Research, 2015, vol. 241, issue 3, 842-850

Abstract: In a bankruptcy situation individuals are not equally affected since each one has its own specific characteristics. These aspects cannot be ignored and may justify an allocation bias in favor of or against some individuals. This paper develops a theory of differentiation in claims problems that considers not only the vector of claims, but also some justified differentiating criteria based on other characteristics (wealth, net-income, GDP, etc.). Accordingly, we propose some progressive transfers from richer to poorer claimants with the purpose of distributing the damage as evenly as possible. Finally, we characterize our solution by means of the Lorenz criterion. Endogenous convex combinations between solutions are also considered.

Keywords: Claims problems; Differentiation; Compensation; Redistribution (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:241:y:2015:i:3:p:842-850

DOI: 10.1016/j.ejor.2014.09.023

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