Peer pressure is when you feel that you have a pressure on you, and you then need to act in certain ways.
Often people experience peer pressure because they want to be accepted by the people they hang out with, and then they act in certain ways.
You might be doing something you wouldn’t normally do or aren’t doing something you want to do.
The narrator is the young leader of the friend group. He may feel that the other boys see it as a weakness that he’s the youngest, and therefore feels pressure to do the things he does in the short story.
It was him who got the idea to hurt Simpson, and he who put the rope around his neck. He says in line 160 "Let's get the fuck out of here" as he hangs Simpson.
But after the process, he's the one who is getting cold feet.
As he runs back to the yard where Simpson hangs, he loosens up Simpson due to guilt. He says in line 175 "Listen, you son of a bitch, do not die, I didn't want to kill you, really".
There are also places in the beginning of the story where the narrator already feels that what they are doing is wrong. For example, in line 135 when he says, "But the look in his eyes was terrified, horrible to see".