An Alternative Game-Theoretic Analysis of a Bankruptcy Problem from the Talmud: The Case of the Greedy Bankruptcy Game

Theo S. H. Driessen

The bankruptcy problem from the Talmud is modelled as a game (in coalitional form with transferable utility) which differs from the "standard bankruptcy game". A non-game theoretic solution to the bankruptcy problem is recovered by two different game theoretic approaches applied to the alternative game. The major game theoretic approach enables to interpret pairwise greedy or modest claims of creditors as largest or smallest core-allocations to creditors in the alternative game. A theory of consistency is elucidated with elementary game theoretic tools and proofs. As a separate topic, the indirect function of the "standard bankruptcy game" is determined and interpreted in an economic manner. The indirect function may be helpful to describe the game itself as well as its core (due to the duality between games and indirect functions).

January, 1996
Published in: 
In: Game Theory IV, year 1998 (yearbook ''Theory of Games and Applications'') (Eds. L.A. Petrosjan and V.V. Mazalov) Nova Science Publishers Inc., New York, USA (1998), 45-61