A successful theory of causal reasoning should be able to account for inferences about counterfactual scenarios. Pearl (2000) has developed a formal account of causal reasoning that has been highly influential but that suffers from at least two limitations as an account of counterfactual reasoning: it does not distinguish between counterfactual observations and counterfactual interventions, and it does not accommodate backtracking counterfactuals. We present an extension of Pearl’s account that overcomes both limitations. Our model provides a unified treatment of counterfactual interventions and backtracking counterfactuals, and we show that it accounts for data collected by Sloman and Lagnado (2005) and Rips (2010). In addition to reasoning about actual states of affairs, humans find it natural to reason about what might have been
