Protective Properties and the Constrained Equal Awards Rule for Claims Problems: A Note
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We investigate the implications of two protective properties, sustainability and exemption, for the resolution of conflicting claims. Under the properties, agents with sufficiently small claims in relation to the other claims and to the amount available are fully reimbursed. Our main results are three characterizations of the constrained equal awards rule. Namely, (1) it is the only rule satisfying sustainability and claims monotonicity, (2) it is the only rule satisfying sustainability and super-modularity, and (3) it is the only rule satisfying exemption, order preservation, and consistency.
KeywordsBankruptcy Problem Residual Claim Claim Problem Small Claim Order Preservation
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