Article ID: | iaor20112019 |
Volume: | 73 |
Issue: | 1 |
Start Page Number: | 55 |
End Page Number: | 73 |
Publication Date: | Feb 2011 |
Journal: | Mathematical Methods of Operations Research |
Authors: | Ortells Txus, Santos Carlos |
Keywords: | bankruptcy, cost allocation |
A division rule for claims problems, also known as bankruptcy or rationing problems, based on the pseudo‐average solution is studied (for 2‐person problems). This solution was introduced in Moulin (Jpn Econ Rev 46:303–332, 1995) for discrete cost allocation problems. Using the asymptotic approach, we obtain a division rule for claims problems. We characterize the division rule axiomatically and show that it coincides with the rule associated to the equal area bargaining solution (this is not true for