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Applied and bridge studies study record
Environment, climate & resourcesThe Satisficing Welfare Theorem: How Behavioral Firms Produce System-Welfare Gaps by Design
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
Provides a theorem, empirical calibration, and game-change proposal. Contributes to organization theory, regulatory design, and welfare economics.
WHAT'S NEW · Formalizes the welfare-exclusion mechanism of behavioral firms, extending BTOF into normative critique. The SWT is novel and directly conjugates to MST.
The Satisficing Welfare Theorem proves that behavioral firms' decision procedures—satisficing, coalitional bargaining—structurally exclude system welfare, producing 'Hollow Wins' where firm and regulator succeed while society degrades. Empirical calibration across oil, banking, and pharma shows welfare wedges of $4.2–$7.8 trillion annually.