The Nature of Causality and its Dark Aspect

31 Pages Posted: 28 Jan 2018 Last revised: 3 Jun 2018

Stavros K. Stavroglou

Department of Mathematical Sciences and Institute for Risk and Uncertainty, University of Liverpool, UK

Athanasios A. Pantelous

Monash University - Department of Econometrics & Business Statistics

Konstantin Zuev

California Institute of Technology

Date Written: January 19, 2018

Abstract

The hidden nature of causality is a puzzling yet critical notion for effective decision-making in ecology, physiology, systemic risk, financial regulation, and much else. We propose a method, based on symbolic dynamics, which scrutinizes beneath the surface of abstract causality and unveils the very nature of causal interactions. Except for the anticipated positive and negative aspects, we disclose an uncharted and complex form of interactions, namely dark causality. The method is validated by models that we know the type of causal interaction a priori. Then the method is applied to real datasets from ecology, physiology and finance. The proposed quantification framework of dark causality extends our understanding for interconnected dynamical systems.

Keywords: Causality, Complex Systems, Interconnected Dynamical Systems

JEL Classification: C00, C01, C02, C10

Suggested Citation

Stavroglou, Stavros K. and Pantelous, Athanasios A. and Zuev, Konstantin, The Nature of Causality and its Dark Aspect (January 19, 2018). Available at SSRN: https://ssrn.com/abstract=3105281 or http://dx.doi.org/10.2139/ssrn.3105281

Stavros K. Stavroglou (Contact Author)

Department of Mathematical Sciences and Institute for Risk and Uncertainty, University of Liverpool, UK ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

Athanasios A. Pantelous

Monash University - Department of Econometrics & Business Statistics ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Konstantin Zuev

California Institute of Technology ( email )

Pasadena, CA 91125
United States

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