The Lexmax Rule for Bankruptcy Problems
Abstract
This paper investigates the use of egalitarian criteria to select allocations in bankruptcy problems. In our work, we characterize the sets of Lorenz maximal elements for these problems. We show that the allocation selected by the Proportional Rule is the only allocation that belongs to all these Lorenz maximal sets. We prove that the Talmud Rule selects the lexicographic maximal element within a certain set. We introduce and analyze a new rule for bankruptcy problems that shares strong similarities with the Talmud Rule.
Keywords:
Bankruptcy problems, Lorenz criterion, lexicographic criterion, Proportional Rule, Talmud Rule
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Articles of "Contributions to Game Theory and Management" are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
