Publication Date
5-1-2022
Abstract
If the overall amount of the company's assets is smaller than its total debts, then a fair solution is to give, to each creditor, the amount proportional to the corresponding debt, e.g., 10 center for each dollar or 50 cents for each dollar. But what if the debt amounts are not known exactly, and for some creditors, we only know the lower and upper bounds on the actual debt amount? What division will be fair in such a situation? In this paper, we show that the only fair solution is to make payments proportional to an appropriate convex combination of the bounds -- which corresponds to Hurwicz optimism-pessimism criterion for decision making under interval uncertainty.
Comments
Technical Report: UTEP-CS-22-54