Friends and Enemies: A Model of Signed Network Formation

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.