  We introduce an approach to deal with self-selection of peers in the
linear-in-means model. Contrary to the existing proposals we do not require to
specify a model for how the selection of peers comes about. Rather, we exploit
two restrictions that are inherent to many such specifications to construct
intuitive instrumental variables. These restrictions are that link decisions
that involve a given individual are not all independent of one another, but
that they are independent of the link behavior between other pairs of
individuals. A two-stage least-squares estimator of the linear-in-means model
is then readily obtained.
