Speaker: Heidi Christina Thysen (Norwegian School of Economics (NHH))

Title: Competing Causal Interpretations: An Experimental Study (with Sandro Ambuehl)

When: Friday, March 15, 10:30am - 12:00pm

Where: Oskar-Morgenstern-Platz 1, 1090 Wien, Lecture hall 2, ground floor (map)

Abstract:

Good decisions require understanding the causal impact of actions on outcomes. Yet, data is often correlational and could stem from multiple causal mechanisms with divergent implications. Our experiments comprehensively characterize choice under competing causal interpretations. Choice features substantial heterogeneity that primarily reflects three types: following misspecified interpretations that make attractive promises, choosing cautiously, and assessing the fit between theory and data. We characterize the properties of ill-fitting interpretations that subjects struggle to recognize. Preferences for more complex models are twice as common as preferences consistent with Occam’s razor. Implications extend to the literatures on Causal Narratives and Model Persuasion.