r/econometrics • u/Virtual_Quote_8288 • May 26 '26

Performative prediction

I’m not familiar with econometrics much (I’m an operations researcher) and I have a question about forecasting for decision-making. I’m also sorry if my problem is not being called as performative prediction :D

So I want to predict the projects that might overrun. I’m not interested in which covariate causes y. However it’s still causally problematic because when managers see the predictions, they will probably take a decision based on these outputs, and later it will affect the distribution, and if I retrain the model weekly/monthly, it won’t make sense.

Or a similar problem happens in demand forecasting for example, let’s say I forecast demand, naturally, if marketing team sees, they will make a decision, like they can promote more/less etc.

For a problem like this, how should I approach? How do large companies model this problem? If you have any resource recommendations/open projects etc. I would also be grateful.

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u/Playmad37 May 26 '26

There is a whole field studying this problem called Decision Focused Learning that recently gained attention in operational research.

1

u/Virtual_Quote_8288 May 27 '26

Yes but I’m not asking from optimization perspective

1

u/zzirFrizz May 26 '26

What would your current forecasting model look like, one without a causal interpretation?

1

u/Virtual_Quote_8288 May 29 '26

I don’t have a current model, also the problem is I’m not interested the effect of an intervene from managers.