Before revision: Decomposition methods are often used to produce counterfactual predictions of outcomes when a policy variable changes . The methods project the observed relationship between the policy variable and the endogenous variable to a counterfactual environment. However, when the endogenous variable is generated by an agent's strategy in a game-theoretic setting and the agent has an incentive to deviate from his strategy after the policy, such predictions are hard to justify .
After revision: When a government announces a new policy in a strategic setting, such as changes to taxes or tariffs, it creates additional signals through media reports or studies on the policy which may be used by economic agents. This may result in a new predicted outcome that is not captured by the analysis based on Bayes Nash equilibria .