If the unique solution to the linear model of interactions (1) is a Bayes-Nash equilibrium of the game for all possible values of β and f , then the ei’s are iid and uniformly distributed over [−1 , 1 ]. [...] 16 Even in the presence of multiple equilibria, therefore, the estimation of the linear model of interactions (1) is valid under the assumption that the data is generated by the unique robust Nash equilibrium. [...] Thus, even holding deterministic utilities constant, the nature of the preference shocks and of the information available to the agents cannot be identified from the data. [...] The number of observations is 74,783, the number of schools is 127, and the number of school-grades is 532. [...] The proportion of observations having a predicted probability between 0 and 1 lies between 96% and 97%.27 Furthermore, in all specifications, the estimated coefficient satisfies the uniqueness condition of Theorem 2.28 The characteristics of the students and their peers also affect smoking behavior.
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