Equalizing solutions for bankruptcy problems revisited

Jose Alcalde and Josep E. Peris

Decisions in Economics and Finance, 2022, vol. 45, issue 2, No 2, 502 pages

Abstract: Abstract When solving bankruptcy problems through equalizing solutions, agents with small claims prefer to distribute the estate according to the Constrained Equal Awards solution, while the adoption of the Constrained Equal Losses solution is preferred by agents with high claims. Therefore, the determination of which is the central claimant, as a reference to distinguish the agents with a high claim from those with a low claim, is a relevant question when designing hybrid solutions, or new methods to distribute the available estate in a bankruptcy problem. We explore the relationship between the equal awards parameter $$\lambda $$ λ and the equal losses parameter $$\mu $$ μ that characterize the two solutions. We show that the central claimant is fully determined by these parameters. In addition, we explore how to compute these parameters and present optimization problems that provide the Constrained Equal Awards and the Constrained Equal Losses solutions.

Keywords: Bankruptcy problem; Constrained Equal Awards; Constrained equal losses; Relative degree of conflict (search for similar items in EconPapers)
JEL-codes: C79 D63 D74 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10203-022-00373-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:decfin:v:45:y:2022:i:2:d:10.1007_s10203-022-00373-y

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/10203/PS2

DOI: 10.1007/s10203-022-00373-y

Access Statistics for this article

Decisions in Economics and Finance is currently edited by Paolo Ghirardato

More articles in Decisions in Economics and Finance from Springer, Associazione per la Matematica
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().