Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2014-03-04
Number: 14-030/II
Author-Name: Arantza Estévez-Fernández
Author-Workplace-Name: VU University Amsterdam
Author-Name: Peter Borm
Author-Workplace-Name: Tilburg University, the Netherlands
Author-Name: M. Gloria Fiestras-Janeiro
Author-Workplace-Name: Universidade de Vigo, Spain
Title: Nontransferable Utility Bankruptcy Games
Abstract: In this paper, we analyze bankruptcy problems with nontransferable utility (NTU) from a game theoretical perspective by redefining corresponding NTU-bankruptcy games in a tailor-made way. It is shown that NTU-bankruptcy games are both coalitional merge convex and ordinal convex. Generalizing the notions of core cover and compromise stability for transferable utility (TU) games to NTU-games, we also show that each NTU-bankruptcy game is compromise stable. Thus, NTU-bankruptcy games are shown to retain the two characterizing properties of TU-bankruptcy games: convexity and compromise stability. As a first example of a game theoretical NTU-bankruptcy rule, we analyze the NTU-adjusted proportional rule and show that this rule corresponds to the compromise value of NTU-bankruptcy games.
Classification-JEL: C71
Keywords: NTU-bankruptcy problem, NTU-bankruptcy game, Coalitional merge convexity, Ordinal convexity, Compromise stability, Core cover, Adjusted proportional rule
File-Url: https://papers.tinbergen.nl/14030.pdf
File-Format: application/pdf
File-Size: 226787 bytes
Handle: RePEc:tin:wpaper:20140030