  In a hierarchical universe, mergers may be an important mechanism not only in
increasing the mass of galaxies but also in driving the color and morphological
evolution of galaxies. We use a large sample of ~1000 simulated galaxies of
stellar mass greater than 10^9.6 solar masses (for ~4800 observations at
multiple redshifts) from a high-res (0.46 h^{-1} kpc) cosmological simulation
to determine under what circumstances being a member of a pair influences
galaxy properties at z <= 0.2. We identify gravitationally bound pairs, and
find a relative fraction of blue-blue, red-red, and blue-red pairs that agrees
with observations (Lin et al. 2010). Pairs tend to avoid the extreme
environments of clusters and void centres. While pairs in groups can include
galaxies that are both blue, both red, or one of each color, in the field it is
rare for pair galaxies to both be red. We find that physically bound pairs
closer than 250 h^{-1} kpc tend to have higher sSFRs than the galaxy population
as a whole. However, the sSFR of a bound galaxy relative to galaxies in a
comparable local density environment (determined by the distance to the fifth
nearest neighbor, rho_5), differs depending on the local density. In regions of
high rho_5 the bound population has a higher fraction of star-forming (bluer)
galaxies, whereas there is very little difference between bound and unbound
galaxies in low rho_5 regions. This effect on the star-forming fraction may be
driven by the higher fraction of bound HI-rich galaxies compared to unbound
galaxies, particularly at high local densities. It appears that being in a pair
has an incremental, but not overwhelming, effect on the star formation rate of
the paired galaxies, compared to the more pronounced trend where galaxies
overall have low sSFR (are red) in clusters and higher sSFR (blue) at the
centre of voids. This trend depends most strongly on rho_5.(abridged)
