This paper describes a range of methods which have been proposed to study interactions in economic and social contexts. By interactions, we refer to interdependences between individual decisions which are not mediated by markets. These types of models have been employed to understand phenomena ranging from the effect of neighborhoods on the life prospects of children to the evolution of political party platforms. We provide a general choice-based framework for modelling such interactions which subsumes a number of specific models which have been studied. This framework illustrates the relationship between interactions-based models and models in statistical mechanics. Our analysis is then extended to the econometrics of these models, with an emphasis on the identification of group-level influences on individual behavior. Finally, we review some of the empirical work on interactions which has appeared in the social science literature.
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ReDIF This chapter was published in: J.J. Heckman & E.E. Leamer (ed.) Handbook of Econometrics, , chapter 54, pages 3297-3380, 2001.
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Related research
This chapter was published in the following book, which is listed on IDEAS: J.J. Heckman & E.E. Leamer (ed.), 2001.
"Handbook of Econometrics,"
Handbook of Econometrics,
Elsevier,
edition 1, volume 5, number 5, September.
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Find related papers by JEL classification: C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
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