Credible AUctions via MPC Gadgets: Bounding Information Leakage Under Abort
Cryptographers propose Sequential Revelation Auctions that limit abort leakage with a small MPC gadget and finite penalties.
The paper studies credible auctions when the auctioneer can control shill bidders and abort an MPC protocol after learning the outcome. It proposes the MPC Decomposition Principle: a small gadget reveals only the winner's identity, not payments, so an abort leaks bounded information. Combined with sequential revelation and finite penalties, the Sequential Revelation Auction is credible when the penalty is at least the sum of per-bidder revenues, and that bound is tight for equal-revenue distributions. Using constant-round MPC, the construction gives a constant-round, incentive-compatible, revenue-optimal credible auction for product distributions with vanishing revenue tails.
- Monolithic MPC lets an auctioneer abort after seeing an unsatisfactory revenue outcome.
- A minimal gadget reveals the winner identity but no payment information.
- A penalty at least the sum of per-bidder revenues is sufficient and tight.
- Constant-round SRA resolves an open question for product distributions with vanishing tails.
Full article244 words · extracted from arxiv.org · click to collapse
The design of credible auctions---mechanisms where a revenue-maximizing auctioneer has no incentive to deviate from the protocol---faces a fundamental cryptographic barrier when the auctioneer controls shill bidders. While a natural approach is to use Secure Multi-Party Computation (MPC) to remove the trusted auctioneer, the impossibility of fair coin flipping of Cleve (1986) implies that monolithic MPC protocols grant the auctioneer a "free option": they can learn the auction's outcome and unilaterally abort if the revenue is unsatisfactory. Cryptographic commitments with ex-ante penalties mitigate this abort asymmetry, but no finite penalty suffices for heavy-tailed distributions. We circumvent this barrier by introducing the MPC Decomposition Principle. Rather than encrypting the entire mechanism, we use MPC strictly as an information-restriction tool. We isolate the winner determination problem into a minimal MPC gadget that computes and reveals the winner's identity but no payment information. This qualitative restriction mathematically bounds the information leaked upon an abort. By combining this gadget with sequential revelation and finite economic penalties, we design the Sequential Revelation Auction (SRA). We prove that bounding the information leakage strictly bounds the value of the free option, showing that a penalty of $k \geq \sum_{i=1}^n Rev(F_i)$ is sufficient for credibility, and tight: for equal-revenue distributions, every smaller penalty admits a profitable deviation. Using constant-round MPC, the SRA resolves an open question of Akbarpour and Li (2020) and Ferreira and Weinberg (2020) by providing a constant-round, incentive-compatible, revenue-optimal credible auction for all product distributions with vanishing revenue tails
Text extracted automatically; images, tables and formatting may be missing. Original: https://arxiv.org/abs/2609.27402