Lorenz Comparisons of Nine Rules for the Adjudication of Conflicting Claims

Abstract

Consider the following nine rules for adjudicating conflicting claims: the proportional, constrained equal awards, constrained equal losses, Talmud, Piniles', constrained egalitarian, adjusted proportional, random arrival, and minimal overlap rules. For each pair of rules in this list, we examine whether or not the two rules are Lorenz comparable. We allow the comparison to depend upon whether the amount to divide is larger or smaller than the half-sum of claims. In addition, we provide Lorenz-based characterizations of the constrained equal awards, constrained equal losses, Talmud, Piniles', constrained egalitarian, and minimal overlap rules.

Keywords: Claims problem, Bankruptcy, Taxation, Lorenz dominance, Progressivity, Proportional rule, Constrained equal awards rule, Constrained equal losses rule, Talmud rule, Piniles' rule, Constrained egalitarian rule, Adjusted proportional rule, Random arrival rule, Minimal overlap rule

JEL Classification: D63