I survey the recent literature on the formation of networks. I provide definitions of network games, a number of examples of models from the literature, and discuss some of what is known about the (in)compatibitily of overall societal welfare with individual incentives to form and sever links.

The science of social networks is a central field of sociological study, a major application of random graph theory, and an emerging area of study by economists, statistical physicists and computer scientists. While these literatures are (slowly) becoming aware of each other, and on occasion...