Social networks affect individual behavior as well as social phenomena. Conversely, when actors can choose with whom to interact, social networks are also themselves affected by individual behavior. This chapter provides an overview of two main classes of formal theoretical models for the analysis of network effects and network formation, namely, game-theoretic models and agent-based simulation models. We first discuss models in which networks are assumed to be exogenous and focus on network effects. More specifically, we focus on models predicting effects of social networks on behavior in social dilemmas. Second, we summarize main approaches to network formation and the dynamics of networks. Third, we review models on the co-evolution of networks and behavior that provide an integrated analysis of network formation and network effects, again focusing on social dilemma problems. The chapter ends with an evaluation of the state of the art of theoretical models for social networks, including open problems and suggestions for future research.