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The predictive role of counterfactuals


  • Alfredo Di Tillio

    (Bocconi University - Bocconi University)

  • Itzhak Gilboa

    () (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique, Tel Aviv University [Tel Aviv])

  • Larry Samuelson

    (Department of Economics - Yale University [New Haven])


We suggest a model that describes how counterfactuals are constructed and justified. The model can describe how counterfactual beliefs are updated given the unfolding of actual history. It also allows us to examine the use of counterfactuals in prediction, and to show that a logically omniscient reasoner gains nothing from using counterfactuals for prediction.

Suggested Citation

  • Alfredo Di Tillio & Itzhak Gilboa & Larry Samuelson, 2012. "The predictive role of counterfactuals," Post-Print hal-00712888, HAL.
  • Handle: RePEc:hal:journl:hal-00712888
    DOI: 10.1007/s11238-011-9263-6
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    References listed on IDEAS

    1. Samet, Dov, 1996. "Hypothetical Knowledge and Games with Perfect Information," Games and Economic Behavior, Elsevier, vol. 17(2), pages 230-251, December.
    2. Stalnaker, Robert, 1996. "Knowledge, Belief and Counterfactual Reasoning in Games," Economics and Philosophy, Cambridge University Press, vol. 12(02), pages 133-163, October.
    3. Battigalli, Pierpaolo & Siniscalchi, Marciano, 1999. "Hierarchies of Conditional Beliefs and Interactive Epistemology in Dynamic Games," Journal of Economic Theory, Elsevier, vol. 88(1), pages 188-230, September.
    4. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
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    induction; counterfactuals; prediction;

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