When selling goods like wireless spectrum or electricity contracts, auction designers often opt for core …-selecting mechanisms -- i.e., auctions that induce outcomes in the core -- in order to balance revenue and efficiency goals. But … when bidders can both buy and sell, substitutability among goods is no longer sufficient or necessary for core selection …

We study dominant strategy implementable direct mechanisms that minimize the expected surplus from core deviations …. Using incentive compatibility conditions, we formulate the core deviation miminimization problem as a calculus of variations …