Equal Awards vs. Equal Losses in Bankruptcy Problems

The Constrained Equal Awards and Equal Losses rules are traditional ways to solve bankruptcy problems. These rules are characterized by two parameters α and β that represent, respectively, the maximum amount a claimant receives, or the maximum amount a claimant loses. Moreover, these rules define a partition in the set of agents: those who are equally rationed, and those sustaining a lower rationing (because their maximal award and maximal loss cannot exceed their claim). We investigate the relationship between α and β, and the corresponding partitions they originate in the set of agents, by using a characteristic τ measuring the relative degree of conflict.