Published January 1, 2018 | Version v1
Journal article Open

Proportional rules for state contingent claims

  • 1. Istanbul Tech Univ, Dept Econ, TR-34367 Istanbul, Turkey
  • 2. Queens Univ Belfast, Queens Management Sch, Riddel Hall,185 Stranmillis Rd, Belfast BT9 5EE, Antrim, North Ireland

Description

We consider rationing problems where the claims are state contingent. Before the state is realized individuals submit claims for every possible state of the world. A rule distributes resources before the realization of the state of the world. We introduce two natural extensions of the proportional rule in this framework, namely, the ex-ante proportional rule and the ex-post proportional rule, and then we characterize them using standard axioms from the literature.

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