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Discrete Choice with Generalized Social Interactions

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Discrete Choice with Generalized Social Interactions


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\begin{frontmatter}
\title{Discrete Choice with Generalized Social Interactions}
\runtitle{Discrete Choice with Generalized Social Interactions}

\begin{aug}
\author[add1]{\fnms{Oscar}~\snm{Volpe}\ead[label=e1]{[email removed]}}
\address[add1]{\orgdiv{Department of Economics}, \orgname{Harvard University}}
\end{aug}

\begin{center}
	\vspace{-0.35cm}
	September 30, 2026
	\vspace{0.75cm}
\end{center}

\begin{funding}
I thank Isaiah Andrews, St\'{e}phane Bonhomme, Ozan Candogan, Arun Chandrasekhar, Michael Dinerstein, Ste-\\ven Durlauf, Ali Horta\c{c}su, Robert Moffitt, Magne Mogstad, Francesca Molinari, Phil Reny, and Alex Torgovitsky for helpful comments and suggestions, as well as seminar participants at the North American UEA Meeting, SITE (Empirical Implementation of Theoretical Models), and the Applied Micro, I/O, and 3rd-year PhD seminars at the University of Chicago. I am grateful to three anonymous referees for invaluable feedback. All errors are my own.
\end{funding}

\begin{abstract}
	This paper studies social interactions in discrete choice models in which indivi-\\duals can respond differently to different network members, conforming to some while distinguishing from others.\hspace{-0.03cm} In this generalized framework,\hspace{-0.02cm} I show how to use within-network variation in individual choices to draw inference about differences in endogenous interaction effects, while accounting for unobserved contextual effects. I also show how to construct internal instruments to correct for measurement error bias, a key source of endogeneity in network models with incomplete information.\hspace{-0.03cm} I apply these results to data from two empirical settings:\hspace{-0.01cm} classroom peer ef-\\[-0.65cm]

	\noindent
	fects in Tennessee primary schools and spillovers in deworming treatment uptake in Kenya. In both applications, I find that differences in social interaction effects, \\ with individuals conforming more strongly to similar peers, play a key role in sha-\\ping people's choices, with implications for the targeting of policy interventions. \\
\end{abstract}

\begin{keyword}
	\kwd{social interaction effects}
	\kwd{discrete choice}
	\kwd{strategic complements and substitutes}
	\kwd{contextual effects}
	\kwd{measurement error bias}
	\kwd{partial identification}
\end{keyword}

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\end{frontmatter}

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