Discrete Choice with Endogenous Peer Selection (opens in new tab)

We develop a continuous time discrete choice model of peer effects. The distinctive feature of the model is that agents might not consider all peers at the moment of making a decision. Instead, they select some of them on the basis of a mechanism that depends on recent choices. We characterize the equilibrium behavior and study the empirical content of the limited attention peer effect model. We allow changes in the choices of peers to affec...