cs.LO — Logic in Computer Science
A Lean Formalization of Myerson-Satterthwaite Impossibility for Continuous Bilateral Trade
We present a source-grounded account of a Lean 4 formalization of the Myerson-Satterthwaite impossibility theorem for continuous bilateral trade. Buyer values and seller costs are independent, with atomless probability measures supported on compact real intervals whose interiors overlap. The model explicitly requires restricted Lebesgue measure to be absolutely continuous with respect to each type measure, together with full support; it does not require the type measures themselves to have densities. Under allocation and transfer measurability and integrability conditions, the registered theorem excludes the simultaneous satisfaction of almost-sure ex post efficiency, Bayesian incentive compatibility at every admissible type and report, interim individual rationality, and weak ex ante budget balance. The proof derives envelope identities from incentive inequalities, identifies the efficient allocation almost everywhere, and uses a layer-cake representation to show that the required information rents strictly exceed efficient surplus. We explain the analytic steps, their Lean declarations, and the verification evidence for the exact Palomar-registered source revision. This is an exposition of a classical result and an existing formal artifact, without a claim of mathematical novelty or formalization priority.