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Friends and Enemies: A Model of Signed Network Formation

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  • Timo Hiller

Abstract

I propose a game of signed network formation, where agents make friends to coerce payoffs from enemies with fewer friends. The model accounts for the interplay between friendship and enmity. Nash equilibrium configurations are such that, either everyone is friends with everyone, or agents can be partitioned into sets of different size, where agents within the same set are friends and agents in different sets are enemies. These results mirror findings of a large body of work on signed networks in sociology, social psychology, international relations and applied physics.

Suggested Citation

  • Timo Hiller, 2012. "Friends and Enemies: A Model of Signed Network Formation," Bristol Economics Discussion Papers 12/629, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:12/629
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    References listed on IDEAS

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    More about this item

    Keywords

    Network Formation; Structural Balance; Alliances; Contest Success Function;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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