International Journal of Game Theory

, Volume 42, Issue 4, pp 973-988

First online:

Stochastic bankruptcy games

  • Helga HabisAffiliated withDepartment of Economics, Lund UniversityDepartment of Microeconomics, Corvinus University of BudapestInstitute of Economics, CERS-HAS
  • , P. Jean Jacques HeringsAffiliated withDepartment of Economics, Maastricht University Email author 

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We study bankruptcy problems where the estate and the claims have stochastic values and we allow these values to be correlated. We associate a transferable utility game with uncertainty to a stochastic bankruptcy problem and use the Weak Sequential Core as a solution concept for such games. We test the stability of a number of well known division rules in this stochastic setting and find that all of them are unstable, with the exception of the stochastic extension of the Constrained Equal Awards rule which leads to a Weak Sequential Core element.


Transferable utility games Uncertainty Weak Sequential Core Bankruptcy games

JEL Classification

C71 C73