Mediation in Bankruptcy Problems

Josep E. Peris and José M. Jiménez-Gómez ()
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José M. Jiménez-Gómez: Universitat Rovira i Virgili, Postal: Department d'Economia, CREIP and GRODE, Av. de la Universitat 1,, 43204 Reus,, Spain
Authors registered in the RePEc Author Service: José-Manuel Giménez-Gómez ()

No 12-2, QM&ET Working Papers from University of Alicante, D. Quantitative Methods and Economic Theory

Abstract: Mediation is a dispute resolution process where agents reach a mutually acceptable agreement among prominent proposals. This paper provides a natural way of coming to this agreement in bankruptcy problems. The central fact is that such problems can be faced from two different (focal) points of view: awards and losses. Given this views, we assume that agents decide a group of principles on which the distribution of the available resources should be based. Next we define a double recursive process by the application of both a lower and an upper bound on awards. Finally, we obtain that this process concludes at the midpoint between the two focal rules. By applying the result to some possible sets of principles we retrieve the average of old and well known bankruptcy rules.

Keywords: Bankruptcy problems; Midpoint; Bounds; Recursivity (search for similar items in EconPapers)
JEL-codes: C71 D63 D71 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012-01-26
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Persistent link: https://EconPapers.repec.org/RePEc:ris:qmetal:2012_002

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