Who Should Be My Friends? Social Balance from the Perspective of Game Theory

We define balance games, which describe the formation of friendships and enmity in social networks. We show that if the agents give high priority to future profits over short term gains, all Pareto optimal strategies will eventually result in a balanced network. If, on the other hand, agents prioritize short term gains over the long term, every Nash equilibrium eventually results in a network that is stable but that might not be balanced.