Coalitions, the Me-First Rule, and the Liquidation Decision
Conventional wisdom in economics recommends that a bankrupt firm with liquidation value greater than going-concern value be liquidated by the creditors and that a firm with going-concern value greater than liquidation value continue to operate. Recently, counterexamples to the traditional rule have been presented. This note argues that violation of the me-first rule is responsible for these counterexamples. Since violation of the me-first rule involves the absence of value-maximization on the part of some economic agents, economic theories concerned with rational behavior may justifiably still assume that the liquidation decision follows the traditional rule.
Year of publication: |
1980
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Authors: | Ang, James S. ; Chua, Jess H. |
Published in: |
Bell Journal of Economics. - The RAND Corporation, ISSN 0361-915X. - Vol. 11.1980, 1, p. 355-359
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Publisher: |
The RAND Corporation |
Saved in:
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