New Characterizations of Old Bankruptcy Rules

This paper presents axiomatic characterizations of two bankruptcy rules disscused in Jewish legal literature: the Constrained Equal Awards rule and the Contested Garment principle (the latter is defined only for two-creditor problems.) A major property in these characterizations is independence of irrelevant claims, which requires that if an individual claim exceeds the total to be allocated the excess claim should be considered irrelevant.

Formation of Nations in a Welfare State Minded World

We model the endogenous formation of nations in a world economy where nations apply redistributive policies. We show that stronger distributive policies may lead to greater inequality in the world's distribution of income as a result of rich individuals tending to form their own nations. By the same token, stable economic integration occurs only when redistributive policies are not too strong.

Invariance and Randomness in the Nash Program for Coalitional Games

By introducing physical outcomes in coalitional games we note that coalitional games and social choice problems are equivalent (implying that so are the theory of implementation and the Nash program). This clarifies some misunderstandings (in regrad to invariance and randomness), sometimes found in the Nash program.Nash program; implementation; scale invariance; ordinal invariance; randomness

An axiomatization of the leveling tax-transfer policy

We show that the leveling tax-transfer policy is the only consistent policy that exploits the maximum allowed transfers, as long as these are no more than the amount sufficient to equalize after-tax incomes. The leveling policy stands in contrast to equal sacrifice policies, which are also consistent but do not conduct any transfers.

The time-preference Nash solution

We give an axiomatic characterization of the Time-Preference Nash Solution, a bargaining solution that is applied when the underlying preferences are defined over streams of physical outcomes. This bargaining solution is similar to the ordinal Nash solution introduced by Rubinstein, Safra, and Thomson (1992), but it gives a different prediction when the set of physical outcomes is a set of lotteries.

A Characterization of the Nash Bargaining Solution

We characterize the Nash bargaining solution replacing the axiom of Independence of Irrelevant Alternatives with three independent axioms: Independence of Non-Individually Rational Alternatives, Twisting and Disagreement Point Convexity. We give a non-cooperative bargaining interpretation to this last axiom.bargaining problem; Nash solution; axiomatic characterization; Independence of Non-Individually Rational Alternatives; Twisting; Disagreement Point Convexity

The Time-Preference Nash Solution

We give an axiomatic characterization of the Time-Preference Nash Solution, a bargaining solution that is applied when the underlying preferences are defined over streams of physical outcomes. This bargaining solution is similar to the ordinal Nash solution introduced by Rubinstein, Safra and Thomson (1992), but it gives a different prediction when the set of physical outcomes is a set of lotteries.bargaining, ordinal Nash solution.

Feasible Implementation of Taxation Methods

This paper studies the problem of implementation of taxation methods in one-commodity environments in which the taxable incomes of the (at least two) agents are fixed and not known to the planner. In this problem (unlike most work in implementation theory), the feasible set is unknown to the designer. We first show that feasibility out of equilibrium imposes that the mechanism depend on the environment. Next we present two game forms. In the first one, which requires complete information among the tax payers, each agent reports the incomes of all players to a central agency, and implementation of every taxation method is obtained in Nash, strong and coalition-proof equilibrium. In the second, informational requirements may be somewhat relaxed. One of the agents makes a tax proposal, the others bargain with him, and the services of a central agency are used only to solve disputes between pairs of agents. This game form implements a large class of consistent and monotone taxation methods in subgame perfect equilibrium. Neither mechanism employs the off-equilibrium devices used by the general theory. Partial departures from complete information still allow for implementability. However, under fully private information implementation is not possible.Feasible Implementation; Taxation Methods; Consistency; Decentralization; Information; Flat Tax

A Noncooperative View of Consistent Bankruptcy Rules

We introduce a game form that captures a noncooperative dimention of the consistency property of bankruptcy rules. Any consistent and monotonic rule is fully characterized by a bilateral principle and consistency. Like the consistency axiom, our game form, together with the bilateral principle, yields the corresponding consistent bankruptcy rule as a result of a unique outcome of Nash equilibria. The result holds for a large class of consistent monotone rules, including the Constrained Equal Award, the Proportional Rule, and many other well known rules. Moreover, all the subgame perfect equilibria are coalition-proof in the associated game in strategic form.

Bargaining, Coalitions, and Competition

We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods.Finite coalitions and Edgworthian theory of exchange; marginal artes of substitution and Jevonsian theory of exchange; matching and bargaining; core; Walrasian equilibrium