<p>These are widely used technical terms with a precise mathematical meaning:</p>

<p><em>Ex-ante budget balance</em> means that the expected sum of all transfers is zero.</p>

<p><em>Ex-post budget balance</em> means that the sum of all transfers is zero with probability one. Some authors require that the sum of transfers is always zero. </p>

CC BY-SA 4.0
2018-05-22T10:31:33.453Z
2018-05-22T10:31:33.453Z
Michael Greinecker
<p>Have I understood this correctly?</p>

<p>When I say my auction mechanism is ex-post budget balanced it means that in practice (I have done market simulations) and according to the results my mechanism is budget balanced. whereas, if the mechanism is ex-ante it means we only anticipate that it is budget balanced?</p>

<p>A reviewer of my paper has asked me to explain in the paper what ex-post and ex-ante means. How would you suggest to explain it?</p>

CC BY-SA 4.0
2018-05-22T09:47:50.553Z
Link to a working paper version of your paper?
Giskard
<auctions><mechanism-design><experimental-economics>
Ex-post vs Ex-ante Budget Balance in Auctions
Nima Afraz
# Ex-post vs Ex-ante Budget Balance in Auctions

(Asked by: username_0 on 2018-05-22)

Have I understood this correctly?

When I say my auction mechanism is ex-post budget balanced it means that in practice (I have done market simulations) and according to the results my mechanism is budget balanced. whereas, if the mechanism is ex-ante it means we only anticipate that it is budget balanced?

A reviewer of my paper has asked me to explain in the paper what ex-post and ex-ante means. How would you suggest to explain it?

**Tags:** auctions, mechanism-design, experimental-economics
> **Comments:**
> **username_1**: Link to a working paper version of your paper?  

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## 1 answers

### Answer by username_2 on 2018-05-22. Score: 5 | Accepted answer

These are widely used technical terms with a precise mathematical meaning:

*Ex-ante budget balance* means that the expected sum of all transfers is zero.

*Ex-post budget balance* means that the sum of all transfers is zero with probability one. Some authors require that the sum of transfers is always zero.


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