Behavioural Causal Inference
Review of Economic Studies
2026
Abstract When inferring causal effects from correlational data, a common practice by professional researchers but also lay people is to control for potential confounders. Inappropriate controls produce erroneous causal inferences. I model decision-makers (DMs) who use endogenous observational data to learn actions’ causal effect on payoff-relevant outcomes. Different DM types use different controls. Their resulting choices affect the very correlations they learn from, thus calling for an equilibrium analysis of the steady-state welfare cost of bad controls. I obtain tight upper bounds on this cost. Equilibrium forces drastically reduce it when types’ sets of controls contain one another.
- DOI
- 10.1093/restud/rdaf050
- Volume
- 93 (2)
- Pages
- 1323-1353
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref