Spillover effects can occur in a variety of different ways. Common applications include the analysis of social network spillovers and geographic spillovers. Examples include the following:
In such examples, treatment in a randomized-control trial can have a direct effect on those who receive the intervention and also a spillover effect on those who were not directly treated.
One important caveat is that this procedure excludes all units whose probability of exposure is zero (ex. a unit that is not connected to any other units), since these numbers end up in the denominator of the IPW regression.