A social interaction model with ordered choices

- We propose a social interaction model with ordered choices.
- The model has a micro-foundation based on an incomplete information game.
- Sufficient existence condition for a unique equilibrium of game is characterized.
- Identification and estimation by NFXP and NPL algorithms are discussed.
- Finite sample performance of the estimation methods is investigated.

We introduce a social interaction model with ordered choices. We provide a micro-foundation for the econometric model based on an incomplete information network game, and characterize the sufficient condition for the existence of a unique equilibrium of the game. We discuss the identification of the model, and propose to estimate the model by the NFXP and NPL algorithms. We conduct Monte Carlo simulations to investigate the finite sample performance of these two estimation methods.