This paper explores an old solution for bankruptcy problems, described by Ibn Ezra in the XII century. Particularly, we introduce a new way of extending the Ibn Ezra
s proposal,
the Generalized Ibn Ezra solution, by imposing that the general distribution principle from which it is inspired remains fixed. In this context, we follow the interpretation of bankruptcy problems in terms of TU games given in O
Neill (1982), and propose the analysis of the
Transition Game associated to bankruptcy problems to provide a characterization for the Generalized Ibn Ezra solution.
Keywords and Phrases: Bankruptcy problems - Cooperative games - Ibn Ezras proposal.
Received: 14 October 2003, Revised: 26 May 2004, JEL Classification Numbers:
C71, D63, D71.
Correspondence to: José Alcalde: alasur@merlin.fae.ua.es
We are grateful to Carmen Herrero, Juan de Dios Moreno, William Thomson and an anonymous referee for helpful comments. Authors
work is partially supported by the Institut Valenciá d
Investigacions Económiques. Alcalde and Silva acknowledge support by FEDER and the Spanish Ministerio de Educación y Cultura under project BEC 2001-0535. Marco acknowledges support by the Fundación Séneca, and the Spanish Ministerio de Educación y Cultura under projects SEC2000-0838 and BEC 2001-0781.