Mark started taking guitar lessons when all his cousins started playing guitar.This is an example of ________.

Question

Quizplus · Accepted Answer

A peer effect refers to the influence that peers or a social group has on an individual's behavior or actions. In this case, Mark's decision to start taking guitar lessons was influenced by the fact that his cousins were all playing guitar. This is a classic example of a peer effect. Moral hazard, adverse selection, and pecuniary externality do not apply to this situation.

Mark Started Taking Guitar Lessons When All His Cousins Started