Abstract:
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This paper provides a natural way of reaching an agreement between two
prominent proposals in a bankruptcy problem. Particularly, using the fact
that such problems can be faced from two different points of views, awards
and losses, we justify the average of any pair of dual bankruptcy rules through
the definition a double recursive process. Finally, by considering three posible
sets of equity principles that a particular society may agree on, we retrieve
the average of old and well known bankruptcy rules, the Constrained Equal
Awards and the Constrained Equal Losses rules, Piniles’ rule and its dual
rule, and the Constrained Egalitarian rule and its dual rule.
Keywords: Bankruptcy problems, Midpoint, Bounds, Duality, Recursivity.
JEL classification: C71, D63, D71. |