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Applied and bridge studies study record
Hollow Win theory & mechanismsPrivate Information and Non-Participant Welfare: A General Impossibility Theorem
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.
Contribution — what this adds to the conversation
Provides a bounded theorem with clear assumptions, proof via reduction, and constructive second-best. Organizes six Satterthwaite results under one outsider-exclusion wedge.
WHAT'S NEW · Original theorem: shows that even a designer who wishes to include non-participant welfare cannot do so while preserving incentive compatibility, participation, budget balance, and constrained efficiency in a bounded class. Novel reduction to Myerson-Satterthwaite.
The paper establishes the Non-Participant Welfare Impossibility Theorem: in environments with private information, no mechanism can simultaneously satisfy incentive compatibility, participation, budget balance, outsider welfare neutrality, and constrained efficiency. It extends Myerson-Satterthwaite to welfare borne by parties outside the mechanism, complementing the Missing System Theory.