Title 6.2. Causal Diagram.pdf ✅

pacmann.io © 2022 – Pacmann AI 6 Background Let's go through a simple example where we have knowledge about the process that generates the data.
pacmann.io © 2022 – Pacmann AI 7 Background We generate the data using these process: - 30% firms are tech company - Tech firms on average spend $3 mil more defending IP (Internet Protocol) lawsuits - Tech firms also have higher profits than non tech firms. - But IP lawsuits spend give lower profits
pacmann.io © 2022 – Pacmann AI 8 Background We want to know the effect of IP_spend to profit ● What if we calculate the pearson correlation? ● We see positive correlation!
pacmann.io © 2022 – Pacmann AI 9 Background ● What happen? ● What do we know about this situation?