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Using Theorema in the Formalization of Theoretical Economics
 Proceedings CICM 2011, pages 58–73, 2011. + 11] [KW11] [Lan11] [Lib10
"... Abstract. Theoretical economics makes use of strict mathematical methods. For instance, games as introduced by von Neumann and Morgenstern allow for formal mathematical proofs for certain axiomatized economical situations. Such proofs can—at least in principle—also be carried through in formal syste ..."
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Abstract. Theoretical economics makes use of strict mathematical methods. For instance, games as introduced by von Neumann and Morgenstern allow for formal mathematical proofs for certain axiomatized economical situations. Such proofs can—at least in principle—also be carried through in formal systems such as Theorema. In this paper we describe experiments carried through using the Theorema system to prove theorems about a particular form of games called pillage games. Each pillage game formalizes a particular understanding of power. Analysis then attempts to derive the properties of solution sets (in particular, the core and stable set), asking about existence, uniqueness and characterization. Concretely we use Theorema to show properties previously proved on paper by two of the coauthors for pillage games with three agents. Of particular interest is some pseudocode which summarizes the results previously shown. Since the computation involves infinite sets the pseudocode is in several ways noncomputational. However, in the presence of appropriate lemmas, the pseudocode has sufficient computational content that Theorema can compute stable sets (which are always finite). We have concretely demonstrated this for three different important power functions. 1
A Qualitative Comparison of the Suitability of Four Theorem Provers for Basic Auction Theory ⋆
"... Abstract Novel auction schemes are constantly being designed. Their design has significant consequences for the allocation of goods and the revenues generated. But how to tell whether a new design has the desired properties, such as efficiency, i.e. allocating goods to those bidders who value them m ..."
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Abstract Novel auction schemes are constantly being designed. Their design has significant consequences for the allocation of goods and the revenues generated. But how to tell whether a new design has the desired properties, such as efficiency, i.e. allocating goods to those bidders who value them most? We say: by formal, machinechecked proofs. We investigated the suitability of the Isabelle, Theorema, Mizar, and Hets/CASL/ TPTP theorem provers for reproducing a key result of auction theory: Vickrey’s 1961 theorem on the properties of secondprice auctions. Based on our formalisation experience, taking an auction designer’s perspective, we give recommendations on what system to use for formalising auctions, and outline further steps towards a complete auction theory toolbox. 1
Developing an Auction Theory Toolbox
"... Abstract. Auctions allocate trillions of dollars in goods and services every year. Auction design can have significant consequences, but its practice outstrips theory. We seek to advance auction theory with help from mechanised reasoning. To that end we are developing a toolbox of formalised represe ..."
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Abstract. Auctions allocate trillions of dollars in goods and services every year. Auction design can have significant consequences, but its practice outstrips theory. We seek to advance auction theory with help from mechanised reasoning. To that end we are developing a toolbox of formalised representations of key facts of auction theory, which will allow auction designers to have relevant properties of their auctions machinechecked. As a first step, we are investigating the suitability of different mechanised reasoning systems (Isabelle, Theorema, and TPTP) for reproducing a key result of auction theory: Vickrey’s celebrated 1961 theorem on the properties of second price auctions – the foundational result in modern auction theory. Based on our formalisation experience, we give tentative recommendations on what system to use for what purpose in auction theory, and outline further steps towards a complete auction theory toolbox. 1