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A new characterization of the proportional rule for claims problems

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  • Thomson, William

Abstract

For the problem of adjudicating conflicting claims, we develop a new proof of an important result due to Young (1995), a characterization of the proportional rule, rather, we prove a dual characterization of this rule. Our axioms are composition down, which states the equivalence of two ways of dealing with possible decreases in the amount to divide, and self-duality, according to which, for each problem, a rule divides what is available symmetrically to the way it divides what is missing, that is, the difference between the sum of the claims and the endowment, in the dual problem.

Suggested Citation

  • Thomson, William, 2016. "A new characterization of the proportional rule for claims problems," Economics Letters, Elsevier, vol. 145(C), pages 255-257.
    • Handle: RePEc:eee:ecolet:v:145:y:2016:i:c:p:255-257
    DOI: 10.1016/j.econlet.2016.07.009
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    References listed on IDEAS

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    1. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
    2. Young, H. P., 1988. "Distributive justice in taxation," Journal of Economic Theory, Elsevier, vol. 44(2), pages 321-335, April.
    3. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
    4. Thomson, William, 2015. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: An update," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 41-59.
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    Cited by:

    1. Péter Csóka & P. Jean-Jacques Herings, 2021. "An Axiomatization of the Proportional Rule in Financial Networks," Management Science, INFORMS, vol. 67(5), pages 2799-2812, May.
    2. Karol Flores-Szwagrzak & Jaume García-Segarra & Miguel Ginés-Vilar, 2020. "Priority and proportionality in bankruptcy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(4), pages 559-579, April.
    3. Dietzenbacher, Bas, 2018. "Egalitarian allocation principles," Other publications TiSEM 01be3135-efa6-4f51-b2ef-0, Tilburg University, School of Economics and Management.
    4. Csóka, Péter, 2017. "Az arányos csődszabály karakterizációja körbetartozások esetén [The characterization of the proportional rule in the case of circular liabilities]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 930-942.

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    More about this item

    Keywords

    Claims problems; Proportional rule; Composition down; Self-duality;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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