A noncooperative view of consistent bankruptcy rules Academic Article uri icon

abstract

  • We introduce a game form that captures a noncooperative dimension of the consistency property of bankruptcy rules. Any consistent and monotone rule is fully characterized by a bilateral principle and consistency. Like the consistency axiom, our game form, together with a bilateral principle, yields the corresponding consistent bankruptcy rule as a result of a unique outcome of Nash equilibria. The result holds for a large class of consistent and monotone rules, including the Constrained Equal Award, the Propositional Rule, and many other well known rules. Moreover, all of the subgame perefect equilibria are coalition-proof in the associated game in strategic form. Journal of Economic LiteratureClassification Numbers: C72 and D63.

publication date

  • January 1, 1997