Counterfactuals with Latent Information

S-Tier
Journal: American Economic Review
Year: 2022
Volume: 112
Issue: 1
Pages: 343-68

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We describe a methodology for making counterfactual predictions in settings where the information held by strategic agents and the distribution of payoff-relevant states of the world are unknown. The analyst observes behavior assumed to be rationalized by a Bayesian model, in which agents maximize expected utility, given partial and differential information about the state. A counterfactual prediction is desired about behavior in another strategic setting, under the hypothesis that the distribution of the state and agents' information about the state are held fixed. When the data and the desired counterfactual prediction pertain to environments with finitely many states, players, and actions, the counterfactual prediction is described by finitely many linear inequalities, even though the latent parameter, the information structure, is infinite dimensional.

Technical Details

RePEc Handle
repec:aea:aecrev:v:112:y:2022:i:1:p:343-68
Journal Field
General
Author Count
3
Added to Database
2026-01-24