Proportional rules for state contingent claims

Ertemel, Sinan; Kumar, Rajnish

doi:10.1007/s00182-017-0585-7

Cited by 18 publications

(5 citation statements)

References 27 publications

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“…For each individual i, driven by von Neumann-Morgenstern preferences over money lotteries, i denotes the induced preference over I D . 6 Theorem 3. The rule φ has the ex-post form, if and if, the induced i satisfies indifference to independent combinations for every risk neutral i ∈ N .…”

Section: Resultsmentioning

confidence: 99%

“…Additionally, we also provide a simple behavioral characterization of rules that have the ex-post form. Ertemel & Kumar (2018) base their characterization of ex-ante and ex-post proportional rules on Moulin's (1985) No Advantageous Reallocation (NAR) axiom which says that no group of individuals can jointly benefit by reallocating their claims among themselves. They obtain the desired characterizations by extending NAR to state contingent claims framework and adopting some standard axioms from the literature.…”

Section: Introductionmentioning

confidence: 99%

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Parametric Rules for State Contingent Claims

2022

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Parametric Rules for State Contingent Claims

2022

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“…All efficient linear and symmetric values satisfy this axiom. Making use of a similar axiom, Ertemel and Kumar (2018) characterize an extension of the proportional rule for rationing problems, which is similar to our α-mollified value in that context.…”

Section: Axiomatization Of the Family Of α-Mollified Valuesmentioning

confidence: 99%

Compromising between the Proportional and Equal Division Values: Axiomatization, Consistency and Implementation

2020

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We introduce a family of values for TU-games that offers a compromise between the proportional and equal division values. Each value, called an α-mollified value, is obtained in two steps. First, a linear function with respect to the worths of all coalitions is defined which associates a real number to every TU-game. Second, the weight assigned by this function is used to weigh proportionality and equality principles in allocating the worth of the grand coalition. We provide an axiomatic characterization of this family, and show that this family contains the affine combinations of the equal division value and the equal surplus division value as the only linear values. Further, we identify the proportional division value and the affine combinations of the equal division value and the equal surplus division value as those members of this family, that satisfy projection consistency. Besides, we provide a procedural implementation of each single value in this family.

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“…version of the rationing problem: Ertemel and Kumar ( [5]) characterize versions of our Ex-post and Ex-Ante Service rules in a state contingent claims framework; while Habis and Herings ( [7]) and Xue ([21]) consider stochastic versions of the uniform gains rule.…”

Section: Relation To the Literaturementioning

confidence: 99%

Sharing the cost of risky projects

Hougaard

Moulin

2017

Econ Theory

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Users share the cost of unreliable non rival projects (items). For instance, industry partners pay today for R&D that may or may not deliver a cure to some viruses, agents pay for the edges of a network that will cover their connectivity needs, but the edges may fail, etc.. Each user has a binary inelastic need that is served if and only if certain subsets of items are actually functioning. We ask how should the cost be divided when individual needs are heterogenous. We impose three powerful separability properties:Independence of Timing ensures that the cost shares computed ex ante are the expectation, over the random realization of the projects, of shares computed ex post. Cost Additivity together with Separability Across Projects ensure that the cost shares of an item depend only upon the service provided by that item for a given realization of all other items.Combining these with fair bounds on the liability of agents with more or less ‡exible needs, and of agents for whom an item is either indispensable or useless, we characterize two rules: the Ex Post Service rule is the expectation of the equal division of costs between the agents who end up served; the Needs Priority rule splits the cost …rst between those agents for whom an item is critical ex post, or if there are no such agents between those who end up being served.

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Proportional rules for state contingent claims

Cited by 18 publications

References 27 publications

Parametric Rules for State Contingent Claims

Parametric Rules for State Contingent Claims

Compromising between the Proportional and Equal Division Values: Axiomatization, Consistency and Implementation

Sharing the cost of risky projects

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