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Networks play an important role in economics. For instance, information on job opportunities diffuses over social networks, and our friends sometimes influence the products we buy. Also, in developing countries, networks provide access to insurance and credit. A final example is given by the R&D networks in technology-intensive sectors, in which firms collaborate to develop new products. In many contexts, an agent's position in his network is critical: it determines the speed with which he receives new information, it determines his access to capital, etcetera. In turn, an agent's position in the network may influence his behavior. For instance, an agent who occupies a central position in a network that generates some surplus (e.g., a trade network) may exploit this position to reap a large share of the surplus. It is therefore important to study the following two questions:

1. How do self-interested, strategic agents form networks?
2. How do the resulting network structures affect the behavior of the agents on the network?

These questions are the focus of this minicourse. We start with a brief overview of empirical results on the structure of social and economic networks, and their role in economic settings. Motivated by these empirical findings, we then go on to study the above questions. We mainly take a game-theoretic perspective, but we will briefly touch upon new interdisciplinary approaches.