W hat res e arc h ar e you wo r k in g on r i g ht
no w?
Ac t u a ll y I am wor k in g on a pr oj ec t th a t is
f un de d b y T U BİT A K ( T U BİT A K R et ur n
Fe l lo ws hi p Pr og r am ) . T he pr oj ec t h as t wo
par ts . T he f irs t p ar t is a n ex p er im en ta l t es t
of a t h eor e tic a l p a per b y O zg ur Ki br is a n d
Ar zu K ib ris (2 0 13 ) . In t ha t pa p er , t h e y
c om par e a c o up l e of r u les t h at ar e us ed f or
ba nk ru ptc y pr o bl em s .
Le t m e s t art wi th wh a t a b a nk r up tc y
pr o b l em is . C o ns id er a b a nk r up t f ir m wh os e
m onet ar y wo rt h has t o be a l l oc a te d am on g
its c r ed i to rs . Eac h c r e d it or h o lds a c l a im on
th e f irm a nd t he f ir m 's l iq u i da t io n v a lu e is
l es s th a n th e t ot a l of th e c r e d it or s ' c la im s .
Ho w s h ou l d th e a l l oc a t i on b e d o ne ?
T he ax iom at ic l i te r a t ur e pr o v i d es a l ar ge
v ar ie t y of “b ank ru ptc y r ul es ” as s o lu t io ns .
Am on g t hem , th r e e a r e s i g n if ic an t l y m or e
pr om i ne n t t h an t he o th er s . T h e Pr o por t io n a l
r u le ( PR O ) s ug g es ts a l loc a t i o n of th e es ta te
pr o p ort i o na l to t he c l a im s . T he Eq u al
A war ds ru l e ( EA ) s u gg es ts eq u al d i v is i o n of
th e es ta te . T h e E q u a l Los s es r u l e ( E L)
s ug g es ts t o eq u at e ac r os s ag e nts th e
d if f er e nc e be t we en t he ir c l aim s an d t he ir
s har e s . T he ac t u a l b a nk r up tc y l a ws s e em to
ha v e pr ef err ed P RO o ver t he o th er r u les .
T he ra t io n a le b e hi n d th is c ho ic e m ig h t b e
pur e l y h is t or ic a l , or it m i gh t b e th at
go v er nm ents at tac h m or e im por ta nc e to t h e
ax iom s th a t c har ac t er i ze PRO o v er t he
ax iom s t ha t c h arac t er i ze th e o th er r u l es .
O zg ur K i br is a n d Ar zu K i br is ( 2 0 13 )
pr o p os e to ex p l or e a no t her ex p l an a ti o n as
to t h e p op u l ar it y of PRO . Al t er n a ti v e
ba nk ru ptc y r u les af f ec t th e i n v es tm en t
be h a v ior i n a c o un tr y i n d if f er en t wa ys . In a
wa y,
eac h
rule
i nd uc es
a
d if f er e nt
“ no nc o op er at i v e in v e s tm ent g am e” am on g
th e i n ves t ors . C om pa r i ng t he e q u i li br i a of
th es e g am es , i n t er m s of t ot a l in v es tm e nt
an d s oc ia l we lf ar e , is an ot h er wa y of
c om par in g a lt er na t i v e b a nk r up tc y r u l es .
W hen th e y c om par e d t hes e t hr ee r u les ,
th e y f o u nd t ha t t h e E qu a l L os s es R ul e
br in gs h i g her t o ta l i n ves tm ent t h a n th e
Pr op or ti o n al R u l e an d th e E q ua l A war ds
Ru l e. T he y a ls o f ou n d t ha t p eo p l e’s
i n ves tm ents are af f ec t e d b y th e ir ris k
a ver s i o ns , th e r is k av er s io n of th e ot her
c r ed i to rs , pr o ba b i l it y o f bank r u ptc y, an d t h e
v a lu e of th e f irm af ter ba nk r u ptc y.
T o s ugg es t a p o lic y c ha n ge ac c or d i ng t o
th es e res ul ts , th er e s ho u ld b e em p ir ic a l
e v id e nc e as we l l. S i n c e it is v er y h ard t o
tes t th es e r es u l ts wi t h th e f ie l d d at a, we
(O zg ur Ki br is , Ar zu K ibr is , a n d M e hm et
Yi g i t G urd a l) dec i d ed to r u n a n ex p er im en t
wh ic h c om par es th e ef f ec t of t hes e ru l es on
to ta l
in v es tm ent
by
r e a li zi n g
th e
no nc oo p er at i v e i n ves t m ent g am e des c r i be d
i n O zg ur K ibr is a nd A r zu Ki br is ( 20 1 3). W e
a ls o lo ok a t ho w s u bj e c ts ’ r is k a v ers io n a n d
ot h er c r e di t ors ’ r is k a vers i o n i n th e f irm
af f ec t th e ir i n v es tm en t s .
As a f o l lo w - up t o t h is proj ec t , I wil l tr y to
un d ers t a nd if pe o pl e wer e t o c h oos e t he ir
ba nk ru ptc y
r u le s
rat h er
t h an
b e i ng
ex o g en o us l y as s ig n e d ba nk ru ptc y ru l es ,
ho w s uc h a s i tu at i o n wo u l d af f ec t th e ir
i n ves tm ent b e ha v i or. Fur th er , I am a ls o
i nt eres t ed in ho w t h