Abstract We present and analyze coalitional affifinity games, a family of hedonic games that explicitly model the value that an agent receives from being associated with other agents. We provide a characterization of the social-welfare maximizing coalition structures, and study the stability properties of affifinity games, using the core solution concept. Interestingly, we observe that members of the core do not necessarily maximize social welfare. We introduce a new measure, the stability-gap to capture this difference. Using the stability gap, we show that for an interesting class of coalitional affifinity games, the difference between the social welfare of a stable coalition structure and a social welfare maximizing coalition structure is bounded by a factor of two, and that this bound is tight