A proportional approach to bankruptcy. Problems with a guaranteed minimum

José M. Jiménez Gómez () and Josep E. Peris
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José M. Jiménez Gómez: Universidad Politécnica de Cartagena
Authors registered in the RePEc Author Service: José-Manuel Giménez-Gómez ()

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

Abstract: In a distribution problem, and specifically in bankruptcy issues, the Proportional (P) and theEgalitarian (EA) divisions are two of the most popular ways to resolve the conflict. TheConstrained Equal Awards rule (CEA) is introduced in bankruptcy literature to ensure that noagent receives more than her claim, a problem that can arise when using the egalitarian division.We propose an alternative modification, by using a convex combination of P and EA. Therecursive application of this new rule finishes at the CEA rule. Our proposal ensures a minimumamount to each agent, and distributes the remaining estate in a proportional way.

Keywords: Bankruptcy problems; Proportional rule; Equal Awards; Convex combination of rules; Lorenz dominance. (search for similar items in EconPapers)
JEL-codes: C71 D63 D71 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-04
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2012-11.pdf Fisrt version / Primera version, 2012 (application/pdf)

Related works:
Working Paper: A Proportional Approach to Bankruptcy Problems with a guaranteed minimum (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2012-11

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