A Strategic Approach to Bankruptcy Problems Based on the TAL Family of Rules

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Abstract

This paper analyzes bankruptcy problems from a strategic perspective using the parameterized TAL family of bankruptcy rules. We construct a strategic game where every player selects a parameter, and the rule from the TAL family that corresponds to the mean of the chosen parameters is used to divide the estate. We prove the existence of Nash equilibria for this strategic game. In particular, we provide the set of all Nash equilibria for two players, and for more players, we prove existence by constructing a Nash equilibrium of a particular form based on the notion of a pivotal player.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages24
Volume2023-020
Publication statusPublished - 31 Aug 2023

Publication series

NameCentER Discussion Paper
Volume2023-020

Keywords

  • Bankruptcy problems
  • Strategic games
  • TAL family
  • Nash equilibrium

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