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Causal Discourse in a Game of Incomplete Information

Author

Listed:
  • Halbert White

    (Department of Economics, University of California, San Diego)

  • Haiqing Xu

    () (Department of Economics, Texas University)

  • Karim Chalak

    () (Department of Economics, Boston College)

Abstract

Notions of cause and effect are fundamental to economic explanation. Despite the immediate intuitive content of price effects, income effects, and the like, rigorous foundations justifying well-posed discussions of cause and effect in the wide range of settings relevant to economics are still lacking. We illustrate the need for these foundations using the familiar context of an N bidder private-value auction, posing a variety of relevant causal questions that cannot be formally addressed within existing causal frameworks. We extend the causal frameworks of Pearl (2000) and White and Chalak (2009) to introduce topological settable systems, a causal framework capable of delivering the missing answers. In particular, our framework can accommodate choices that are elements of general function spaces. Our analysis suggests how topological settable systems can be applied to support causal discourse in more general games and in other areas of economic inquiry.

Suggested Citation

  • Halbert White & Haiqing Xu & Karim Chalak, 2011. "Causal Discourse in a Game of Incomplete Information," Department of Economics Working Papers 130912, The University of Texas at Austin, Department of Economics.
  • Handle: RePEc:tex:wpaper:130912
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    References listed on IDEAS

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    2. Halbert White & Karim Chalak, 2013. "Identification and Identification Failure for Treatment Effects Using Structural Systems," Econometric Reviews, Taylor & Francis Journals, vol. 32(3), pages 273-317, November.
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    Cited by:

    1. Nianqing Liu & Quang Vuong & Haiqing Xu, 2012. "Rationalization and Identification of Discrete Games with Correlated Types," Department of Economics Working Papers 130915, The University of Texas at Austin, Department of Economics.
    2. repec:eee:econom:v:201:y:2017:i:2:p:249-268 is not listed on IDEAS

    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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