Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97429
Authors: 
Blume, Lawrence E.
Brock, William A.
Durlauf, Steven N.
Jayaraman, Rajshri
Year of Publication: 
2013
Series/Report no.: 
Reihe Ökonomie / Economics Series, Institut für Höhere Studien (IHS) 298
Abstract: 
This paper provides a systematic analysis of identification in linear social interactions models. This is both a theoretical and an econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game that describes individual choices in the presence of social interactions. The equilibrium strategy profiles are linear. Standard models in the empirical social interactions literature are shown to be exact or approximate special cases of our general framework, which in turn provides a basis for understanding the microeconomic foundations of those models. We consider identification of both endogenous (peer) and contextual social effects under alternative assumptions on a priori information about network structure available to an analyst, and contrast the informational content of individual-level and aggregated data. Finally, we discuss potential ramifications for identification of endogenous group selection and differences between the information sets of analysts and agents.
Subjects: 
Social interactions
identification
incomplete information games
JEL: 
C21
C23
C31
C35
C72
Z13
Document Type: 
Working Paper

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