“…In contrast, with few exceptions diffusion analysis remains nonexistent in studies adopting a dyadic framework, that is, a setting where, as in much of international relations research, the unit of analysis is the pair or dyad of two political units representing an interaction or a relation between the two units such as the conclusion of a bilateral treaty or the initiation of violent conflict between two countries+ 3 This is surprising because spatial dependence exists whenever the marginal utility of one unit of analysis depends on the choices of other units of analysis+ What one unit does in relation to other units, with which it forms a dyad, will often influence and be influenced by the relations of other dyads, such that spatial dependence is likely to exist in many dyadic settings+ For example, the conclusion of bilateral treaties by some countries often affects the expected payoffs of other countries from entering into similar treaties themselves+ One potential reason for the lack of studies analyzing spatial dependence in a dyadic framework is that political scientists are not aware of the many specification options for modeling such dependence in dyadic data+ Recognizing the various ways in which spatial effects in dyadic data can be modeled will enable scholars to formulate and test different and novel diffusion channels, thus facilitating and hopefully spurring a whole new generation of studies analyzing spatial dependence between dyads of political units at all levels of the political system-from the global and international right down to the local+ This research note makes two contributions+ First, our analysis enriches the thriving literature applying dyadic data and calls on researchers to take spatial dependence in such data seriously+ Spatial dependence often seems to be theoretically warranted but is practically always ignored+ For example, the conclusion of bilateral and multilateral trade, investment, alliance, and other agreements among some dyads most likely influences the incentives for other dyads to conclude similar agreements+ The conclusion of such agreements often generates externalities, increases competition, induces cooperation, or leads to coercion, learning, emulation, or other effects by which the policy choices of other dyads are affected+ Yet, to our knowledge only three studies analyze spatial dependence in the diffusion of bilateral investment treaties~BITs!, preferential trade agreements, and bilateral alliance formation, respectively+ 4 Another good example is the democratic peace literature+ King argues that "dyadic observations in international conflict data have complex dependence structures+ + + + @I#n dyadic data, observation 1 may be U+S+-Iraq; observation 2, U+S+-Iran; and observation 3, Iraq-Iran+ The dependence among these separate observations is complicated, central to our theories and the inter-2+ See, for example, Cho 2003;Murdoch and Sandler 2004;Simmons and Elkins 2004;Jahn 2006;Franzese and Hays 2006;Gleditsch and Ward 2006;Salehyan and Gleditsch 2006;Swank 2006;and Brooks 2007+ 3+ The rare examples of studies analyzing spatial dependence in dyadic data include Porojan 2001;Manger 2006;…”