Heterogeneity in peer effects for binary outcomes

Mathieu Lambotte

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arXiv · 2511.15891

Heterogeneity in peer effects for binary outcomes

Mathieu Lambotte

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Abstract

I introduce heterogeneity into the analysis of peer effects arising from conformity by allowing peer-effect parameters to vary across agents' actions. Using a structural model based on a simultaneous network game with incomplete information, I derive conditions that guarantee the uniqueness of the equilibrium and the identification of heterogeneous peer-effect parameters. Applying the model to data on smoking and alcohol consumption among secondary school students, and conducting policy simulations, I show that assuming a homogeneous preference for conformity leads to biased estimates of peer effects and ex ante policy evaluations.

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Mathieu Lambotte. 2026-06-04. Heterogeneity in peer effects for binary outcomes. https://arxiv.org/abs/2511.15891

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