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Applied and bridge studies study record
Hollow Win theory & mechanismsMispricing Misconduct
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
Contributes a formal model (Mispricing Misconduct Equilibrium) and empirical calibration of Welfare Beta. Bridges behavioral finance and governance literature. Provides falsifiable conditions.
WHAT'S NEW · Original in applying MST and SAPM to structured products and deriving Welfare Beta bounds. However, the behavioral finance critique and disclosure futility arguments are present in other canon papers. The formal theorems are new but build directly on existing canon constructs.
The paper's argument is that persistent asset mispricing is not a market inefficiency but a structural equilibrium of a flawed bilateral game. Using the Allianz Structured Alpha fraud and the 2018 Volmageddon collapse as case studies, it shows how intermediaries and counterparties both gain while system welfare degrades. The paper proposes Decision Accounting via the Conflictoring Protocol as a rule change to make system welfare visible and actionable, unlocking a portion of the $72 trillion annual Reform Dividend.