Endogenous Variables: How Models Determine Outcomes Internally
An endogenous variable is determined by other variables within a model and their interactions. Understanding it helps distinguish whether an outcome arises from the model’s internal mechanisms or is influenced by external conditions.
Basic Concepts
The value of an endogenous variable is not specified in advance from outside the model; it is derived or changed through relationships within the model. For example, in a supply-and-demand model, the price and quantity sold of a commodity may be treated as endogenous variables: when demand increases and supply remains unchanged, the price may rise; when supply increases and demand remains unchanged, the price may fall.
Examples in Corporate and Crypto Networks
In a corporate model, output, sales revenue, and profit change with production capacity, costs, and pricing strategies. In cryptocurrency-related models, price and actual hashrate can be treated as internal outcomes to analyze the relationships among demand, sentiment, miner participation, and incentives. Whether a variable is endogenous depends on the model boundary; no factor should be mechanically treated as the sole direct cause of actual hashrate.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/endogenous-variable
Mark it complete when you understand it.
Opening a lesson does not complete it automatically. You can change its status at any time.