TY  - JOUR
AU  - Brock,William A.
AU  - Durlauf,Steven N.
TI  - Multinomial Choice with Social Interactions
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 288
PY  - 2003
Y2  - March 2003
UR  - http://www.nber.org/papers/t0288
L1  - http://www.nber.org/papers/t0288.pdf
N1  - Author contact info:
William Brock
Department of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI   537061393
E-Mail: wbrock@ssc.wisc.edu

Steven N. Durlauf
Department of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI  53706-1393
Tel: 608/263-3859
Fax: 608/262-2033
E-Mail: sdurlauf@ssc.wisc.edu
AB  - This paper develops a model of individual decisionmaking in the presence of social interactions when the number of available choices is finite.  We show how a multinomial logit model framework may be used to model such decisions in a way that permits a tight integration of theory and econometrics. Conditions are given under which aggregate choice behavior in a population exhibits multiple self-consistent equilibria.  An econometric version of the model is shown to be identified under relatively weka conditions.  That analysis is extended to allow for general error distributions and some preliminary ways to account for the endogeneity of group memberships are developed.
ER  -