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Linear Social Interactions Models

Author

Listed:
  • Lawrence E. Blume
  • William A. Brock
  • Steven N. Durlauf
  • Rajshri Jayaraman

Abstract

This paper provides a systematic analysis of identification in linear social interactions models. This is a theoretical and econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game for individual choice under social influences that nests standard models as special cases. We consider identification of both endogenous and contextual social effects under alternative assumptions regarding an analyst's a priori knowledge of social structure or access to individual-level or aggregate data. Finally, we discuss potential ramifications for identification of endogenous formation of social structure.

Suggested Citation

  • Lawrence E. Blume & William A. Brock & Steven N. Durlauf & Rajshri Jayaraman, 2015. "Linear Social Interactions Models," Journal of Political Economy, University of Chicago Press, vol. 123(2), pages 444-496.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/679496
    DOI: 10.1086/679496
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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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