Spiegler, Ran;
(2025)
Behavioral Causal Inference.
The Review of Economic Studies
, Article rdaf050. 10.1093/restud/rdaf050.
(In press).
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Abstract
When inferring causal effects from correlational data, a common practice by professional researchers but also lay people is to control for potential confounders. Inappropriate controls produce erroneous causal inferences. I model decision-makers (DMs) who use endogenous observational data to learn actions’ causal effect on payoff-relevant outcomes. Different DM types use different controls. Their resulting choices affect the very correlations they learn from, thus calling for an equilibrium analysis of the steady-state welfare cost of bad controls. I obtain tight upper bounds on this cost. Equilibrium forces drastically reduce it when types’ sets of controls contain one another.
| Type: | Article |
|---|---|
| Title: | Behavioral Causal Inference |
| DOI: | 10.1093/restud/rdaf050 |
| Publisher version: | https://doi.org/10.1093/restud/rdaf050 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10207554 |
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