Causal discourse in a game of incomplete information
Haiqing Xu () and
Karim Chalak ()
Journal of Econometrics, 2014, vol. 182, issue 1, 45-58
Notions of cause and effect are fundamental to economic explanation. Although concepts such as price effects are intuitive, rigorous foundations justifying causal discourse in the wide range of economic settings remain lacking. We illustrate this deficiency using an N-bidder private-value auction, posing causal questions that cannot be addressed within existing frameworks. We extend the frameworks of Pearl (2000) and White and Chalak (2009) to introduce topological settable systems (TSS), a causal framework capable of delivering the missing answers. Particularly, TSS accommodate choices belonging to general function spaces. Our analysis suggests how TSS enable causal discourse in various areas of economics.
Keywords: Auction; Causality; Game of incomplete information; Simultaneous equations; Structural equations (search for similar items in EconPapers)
JEL-codes: C30 C70 (search for similar items in EconPapers)
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Working Paper: Causal Discourse in a Game of Incomplete Information (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:182:y:2014:i:1:p:45-58
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