An Axiomatization of the Proportional Rule in Financial Networks

The most important rule to determine payments in real-life bankruptcy problems is the proportional rule. Many such are characterized by network aspects, and values of agents’ assets endogenous as they depend on extent which claims other agents can be collected. These aspects make an axiomatic analysis challenging. This paper first provide axiomatization financial networks. Our main axiom invariance mitosis. axioms boundedness, limited liability, priority creditors, continuity, impartiality. was accepted Manel Baucells, decision analysis.