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- PREEMINENCE AND SUSTAINABILITY IN BANKRUPTCY PROBLEMS

Antonio Villar () and Carmen Herrero ()

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper focuses on two new properties for bankruptcy rules: preeminence and sustainability. Theypertain to situations when the claims of some agents are much larger than the claims of otheragents. They differ in the way the recommend agents with small claims to be treated. Preeminencerequires that the agents with very small claims should no be allotted anything. Sustainability takesthe opposite side: claims small enough should be fully honored. Our main results are that the equaltreatment of equals, composition and preeminence, and that the constrained equal-award rule is theonly rule that satisfies equal treatment of equals, path independence and sustainability.

Keywords: bankruptcy problems; constrained equal loss (search for similar items in EconPapers)
Pages: 16 pages
Date: 1998-07
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Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-1998-17.pdf Fisrt version / Primera version, 1998 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1998-17

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