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Outcomes within each nest are correlated, so they do not satisfy IIA. On the other hand, outcomes across nests are not correlated since the stochastic part of the error component will disappear if two outcomes are not in the same nest. Thus outcomes across nests satisfy IIA.
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Outcomes within each nest are correlated, so they do not satisfy IIA. On the other hand, outcomes across nests are not correlated since the stochastic part of the error component will disappear if two outcomes are not in the same nest. Thus outcomes across nests satisfy IIA.