With the abundant information produced by microarray technology, various approaches have been proposed to infer transcriptional regulatory networks. However, few approaches have studied subtle and indirect interaction such as genetic compensation, the existence of which is widely recognized although its mechanism has yet to be clarified. Furthermore, when inferring gene networks most models include only observed variables whereas latent factors, such as proteins and mRNA degradation that are not measured by microarrays, do participate in networks in reality.