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Applied and bridge studies study record
Contracts, agency & organizationsAccounting's Missing Welfare Line
STATUS · Manuscript in progressSSRN · Not yet posted
MECHANISM
Identify the incentive structure and the condition that would falsify the claim.
RULE CHANGE
Read the intervention only after the paper shows how the current payoff space fails to support system welfare.
READER USE
Use the summary to see where private gain creates system exposure, then check the study record.
Reading βW
βW means annual system-welfare loss divided by annual industry revenue Π. Revenue is the denominator, never profit, earnings, or net income; ΔW and Π must use the same domain, same time period, and same activity boundary. See the βW methodology manual.
Contribution — what this adds to the conversation
Extends MST to accounting domain, proves Accounting Hollow Win Theorem, and provides testable falsification conditions.
WHAT'S NEW · Formalizes accounting's welfare omission as a structural game-theoretic defect, provides βW bounding, and proposes Decision Accounting Field 17 as cure.
The paper formalizes how financial accounting and corporate governance structurally omit system-level welfare costs, producing Hollow Win outcomes where managers and shareholders gain while the system degrades. Using the Missing System Theory, it provides a bounded estimate of welfare destruction and proposes integrating Decision Accounting Field 17 into mandatory governance records to transform the game to Win-Win-Win.