Identifying Peer Effects under Reflection: A Panel-Data Approach

Xiaodong Gong () and Benoit Freyens ()
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Xiaodong Gong: University of Canberra
Benoit Freyens: University of Canberra

No 18808, IZA Discussion Papers from IZA Network @ LISER

Abstract: We propose a new approach to identifying peer effects that addresses the reflection problem by using the timing of decisions. The approach combines panel data with the ordering of decisions to separate peer influence from simultaneity. Variation in the order of decisions and in exposure to peers provides the basis for identification, allowing estimation of peer effects in settings where standard approaches are not informative. We illustrate the method using a multi-level panel of more than 2,000 judicial rulings over a 16-year period, where cases are randomly assigned to judges. The data allow us to implement the approach and examine the sources of peer influence. We find heterogeneous and asymmetric responses, with both the magnitude and direction of effects differing across types.

Keywords: peer effects; reflection problem; judicial decisions (search for similar items in EconPapers)
JEL-codes: C18 C23 C81 D85 (search for similar items in EconPapers)
Date: 2026-07
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