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Applied and bridge studies study record
Decision Accounting & recordsThe Transaction-Cost Ledger of Decision Accounting
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
The paper gives that answer. It does so by running the ledger: the cost side and the benefit side, measured against the class of decisions to which DA actually attaches, not against the universe of all organizational activity. It then makes the decisive argument internal to TCE: that DA economizes on a transaction cost that the status quo leaves high — the cost of verifying decision quality after the fact
WHAT'S NEW · DA is tiered: only high-consequence decisions carry the full record; overhead scales with consequential decisions, not total activity. Annual documentation cost for a mid-sized firm is about 0.01% of revenue. Per-decision benefits (hidden-failure loss reduction, conformism break, reconstruction saving, cost-of-capital effect) exceed costs by 2-3 orders of magnitude. DA economizes on the transaction cost of verifying decision quality after the fact, making net transaction costs negative.
The paper defends Decision Accounting (DA) against the Williamson transaction-cost objection by running a formal ledger. It shows that DA applies selectively (tiered governance), that per-decision benefits (reduced hidden-failure loss, conformism break, reconstruction saving, cost-of-capital effect) exceed costs, and that DA actually lowers the transaction cost of verifying decision quality. The paper formalizes the net benefit theorem and provides existence proofs from aviation, healthcare, and financial audit.