EconPapers    
Economics at your fingertips  
 

Bankruptcy Problems with Reference-Dependent Preferences

Andrea Gallice ()

No 555, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: I study bankruptcy problems under the assumption that claimants have referencedependent preferences. I consider different specifications for claimants’ reference points and show how perceived gains and losses impact on aggregate welfare. I can thus rank the four most prominent rules (Proportional, Constrained Equal Awards, Constrained Equal Losses, and Talmud) on the basis of the level of utilitarian and maxmin welfare that they generate. When none of these rules maximizes welfare, I identify the rule that does it and discuss its properties.

Keywords: bankruptcy problems; reference-dependent preferences; reference points; utilitarian welfare; maxmin welfare. (search for similar items in EconPapers)
JEL-codes: D63 D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.carloalberto.org/assets/working-papers/no.555.pdf (application/pdf)

Related works:
Working Paper: Bankruptcy Problems with Reference-Dependent Preferences (2016) Downloads
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:cca:wpaper:555

Access Statistics for this paper

More papers in Carlo Alberto Notebooks from Collegio Carlo Alberto Contact information at EDIRC.
Bibliographic data for series maintained by Giovanni Bert ().

 
Page updated 2019-04-19
Handle: RePEc:cca:wpaper:555