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Applied and bridge studies study record
Health, food & addiction

Designing Deals That Break the Market

STATUS · Manuscript in progressSSRN · Not yet posted
Open teaching deckSSRN — not yet postedPublication record
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 rigorous axiomatic foundation for MST, mechanism design impossibility proof, and empirical βW calculations across multiple domains.
WHAT'S NEW · Original formalization of the system-welfare failure and βW metric; extends mechanism design impossibility to system welfare exclusion.

The paper establishes that privately efficient bilateral deals can systematically destroy the markets they depend on, formalizing the 'Hollow Win' equilibrium where both parties gain but the system loses. Using the βW metric—system welfare destroyed per dollar of revenue—the paper quantifies this corrosion across industries, finding that each dollar of opioid revenue destroyed $150 in welfare. The paper argues that disclosure-only interventions fail and proposes mandatory system welfare impact reporting via Decision Accounting.