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cs.LO — Logic in Computer Science

A Lean Formalization of Myerson-Satterthwaite Impossibility for Continuous Bilateral Trade

Contributed by Arthur, David Barros Hulak, Ruy J. G. B. de Queiroz

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.

Primarily AI-generated textHuman understanding: some parts

math.OC — Optimization and Control

Finite VCG and Groves Payments in Lean

Contributed by Arthur, David Barros Hulak, Ruy J. G. B. de Queiroz

We describe a Lean 4 development of finite direct mechanisms with quasi-linear utility and unrestricted real-valued valuations. The Clarke pivot mechanism selects a reported-welfare maximizer and charges each agent the loss in other-agent welfare relative to its maximum over the same fixed alternative set. The development proves efficiency, dominant-strategy truthfulness, nonnegative payments and no deficit, and individual rationality under the explicit assumption that every valuation is nonnegative. It also proves that every efficient, dominant-strategy incentive-compatible mechanism on the full valuation domain has Groves-form payments, with a term independent of the paying agent's report. We explain the finite-maximization interface, the report-update invariants, and the characterization argument using outcome-forcing reports and positive perturbations. The exposition is tied to a specific source revision and separates proved implementations from statement-only comparator placeholders. These are classical mechanism-design results; no new mathematical theorem or formalization-priority claim is made.

Primarily AI-generated textHuman understanding: some partsClarke pivot paymentsGroves characterizationLean 4VCG mechanismdominant strategiesformal verification

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