The use of linear programming in disentangling the bankruptcies of al-Manakh stock market crash
成果类型：
Article
署名作者：
Elimam, AA; Girgis, M; Kotob, S
署名单位：
Kuwait Institute for Scientific Research
刊物名称：
OPERATIONS RESEARCH
ISSN/ISSBN：
0030-364X
DOI：
10.1287/opre.44.5.665
发表日期：
1996
页码：
665-676
关键词：
摘要：
A highly speculative parallel stock market, called Souk al-Manakh, emerged in Kuwait in 1980-81. Due to the absence of checks and balances, the default of one trader led to the collapse of al-Manakh in 1982. This triggered a major financial national crisis as debts arising from the crash reached a staggering US $94 billion, or more than four times Kuwait's GDP. The crash precipitated an economic recession, business failures, and more bankruptcies among traders. it was impossible for the government or the courts to untangle traders, one at a time, due to their simultaneous dependence on, and entanglement with, each other. We designed a linear programming model to disentangle the bankruptcies of al-Manakh's insolvents. Ie identified solvent from insolvent traders, determined their debt settlement ratios, and set a fair and equitable distribution of debtors' mixed assets to their respective creditors. We demonstrate the special properties of the LP model and its relationship to a system of linear equations through a numerical example. We also present the legal, financial, and economic controversies that arose during the course of resolving the stock market crash, which lasted about four years.