We study social interactions in the initiation of sex and other risky behaviors by best friend pairs in the Add Health panel. Focusing on friends with minimal experience at the baseline interview, we estimate bivariate ordered-choice models that include both peer effects and unobserved heterogeneity. We find significant peer effects in sexual initiation: the likelihood of initiating intercourse within a year increases by almost 5 percentage points (on an 11% base rate) if one's friend also initiates intercourse. Similar effects are present for smoking, marijuana use, and truancy. We find larger effects for females and important asymmetries in nonreciprocated friendships.

We test for customer discrimination with data from more than 800 retail stores employing over 70,000 individuals matched to census data on the demographics of each store's community. While our tests detect some increase in sales when the workforce more closely resembles potential customers, the effects we find are modest in magnitude. Customer discrimination is neither strong nor pervasive. We find little payoff to matching employee demographics to those of potential customers except when the customers do not speak English.