Treatment Allocation with Strategic Agents

Understand

There is increasing interest in allocating treatments based on observed individual characteristics: examples include targeted marketing, individualized credit offers, and heterogeneous pricing.

• Treatment personalization introduces incentives for individuals to modify their behavior to obtain a better treatment.
• Strategic behavior shifts the joint distribution of covariates and potential outcomes.
• The optimal rule without strategic behavior allocates treatments only to those with a positive Conditional Average Treatment Effect.