Lower bounds rule!

R. I. Luttens ()
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R. I. Luttens: -

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: We propose two axioms that introduce lower bounds into resource monotonicity require- ments for rules for the problem of adjudicating con?icting claims. Suppose the amount to divide increases. The ?rst axiom requires that two claimants whose lower bound changes equally experience an equal change in awards. The second axiom requires that extra re- sources are divided only among those claimants who experience a strictly positive change in their lower bound. We show that, in the two-claimant case, Concede-and-Divide is the only rule that satis?es both axioms when the axioms are de?ned over a large set of lower bounds that include the minimal rights lower bound and the secured lower bound. We also show that, in the n-claimant case where at least one claimant claims the total amount, the Minimal Overlap rule is the only rule that satis?es both axioms when the axioms are de?ned over the secured lower bound.

Keywords: Claims problems; Lower bounds; Concede-and-Divide; Minimal Overlap rule. (search for similar items in EconPapers)
JEL-codes: D63 D74 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cis and nep-mic
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