Abstract:

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

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