Causality: a decision theoretic approach

Por • 25 ene, 2019 • Sección: Economía

Pablo Schenone

We propose a decision-theoretic model akin to Savage (1972) that is useful for defining causal effects. Within this framework, we define what it means for a decision maker (DM) to act as if the relation between the two variables is causal. Next, we provide axioms on preferences and show that these axioms are equivalent to the existence of a (unique) Directed Acyclic Graph (DAG) that represents the DM’s preference. The notion of representation has two components: the graph factorizes the conditional independence properties of the DM’s subjective beliefs, and arrows point from cause to effect. Finally, we explore the connection between our representation and models used in the statistical causality literature (for example, Pearl (1995)).

arXiv:1812.07414v1 [econ.TH]

Theoretical Economics (econ.TH)

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