On manipulability in financial systems

Pedro Calleja, Francesc Llerena and Peter Sudhölter

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: We investigate manipulability in the setting of financial systems by considering two weak forms of immunity: non-manipulability via merging and non- manipulability via splitting. Not surprinsingly, non-manipulability via splitting is incompatible with some basic axioms: claim boundedness, limited liability, and absolute priority. Outstandingly, we introduce a large class of financial rules that are immune to manipulations via merging. This class includes the proportional financial rule but also financial rules in accordance with parametric bankruptcy rules fulfilling non-manipulability via merging. Keywords: financial systems, manipulability via merging, manipulability via splitting, parametric bankruptcy rules JEL: C71

Keywords: Entitats financeres; 336 - Finances. Banca. Moneda. Borsa (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Working Paper: On manipulability in financial systems (2021)
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