Constrained equal awards (CEA), also called constrained equal gains, is a division rule for solving bankruptcy problems.
According to this rule, each claimant should receive an equal amount, except that no claimant should receive more than his/her claim.
In the context of taxation, it is known as leveling tax.
[1] There is a certain amount of money to divide, denoted by
, that is, the estate is insufficient to satisfy all the claims.
The CEA rule says that each claimant i should receive
The rule can also be described algorithmically as follows: Examples with two claimants: Examples with three claimants: In the Jewish law, if several creditors have claims to the same bankrupt debtor, all of which have the same precedence (e.g. all loans have the same date), then the debtor's assets are divided according to CEA.
[2][3] The CEA rule has several characterizations.
It is the only rule satisfying the following sets of axioms: The constrained equal losses (CEL) rule is the dual of the CEA rule, that is: for each problem
The ensuing laws apply when creditors whose promissory notes are dated on the same date all come to expropriate property together... How is the property divided?