A NONCOOPERATIVE VIEW OF CONSISTENT BANKRUPTCY RULES

We introduce a game form that captures a noncooperative dimension of t he consistency property of bankruptcy rules. Any consistent and monoto ne rule is fully characterized by a bilateral principle and consistenc y. Like the consistency axiom, our game form, together with a bilatera l principle, yields the corresponding consistent bankruptcy rule as a result of a unique outcome of Nash equilibria. The result holds for a large class of consistent and monotone rules, including the Constraine d Equal Award, the Propositional Rule, and many other well known rules . Moreover, all of the subgame perefect equilibria are coalition-proof in the associated game in strategic form. (C) 1997 Academic Press.