Deterministic Implementation in Single-Item Auctions

Deterministic Implementation in Single-Item Auctions

Yan Liu, Zeyu Ren, Pingzhong Tang, Zihe Wang, Yulong Zeng, Jie Zhang

Proceedings of the Thirty-Fifth International Joint Conference on Artificial Intelligence
Main Track. Pages 3488-3496. https://doi.org/10.24963/ijcai.2026/388

Deterministic auctions are attractive in practice due to their transparency, simplicity, and ease of implementation, motivating a sharper understanding of when they can attain the same outcomes as randomized mechanisms. We study deterministic implementation in single-item auctions under two notions of outcomes: (revenue, welfare) pairs and interim allocations. For (revenue, welfare) pairs, we show a separation in discrete settings: there exists a pair implementable by a deterministic Bayesian incentive-compatible (BIC) auction but not by any deterministic dominant-strategy incentive-compatible (DSIC) auction. For continuous atomless priors, we identify conditions under which deterministic DSIC auctions are equivalent to randomized BIC auctions in terms of achievable outcomes. For interim allocations, under a strict monotonicity condition, we establish a deterministic analogue of Border's theorem for two bidders, providing a necessary and sufficient condition for deterministic DSIC implementability. Using this characterization, we exhibit an interim allocation implementable by a randomized BIC auction but not by any deterministic DSIC auction.
Keywords:
Game Theory and Economic Paradigms: Auctions and market-based systems
Game Theory and Economic Paradigms: Mechanism design