Economic integration as a partition function game
AbstractThis paper provides a methodology to study coalition formation problems with externalities and heterogeneous players, when some subset of the players can act as “coalition developers” over time. The framework provided here allows to explicitly predict the timing of admission to coalitions, the equilibrium coalition structure and payoff distribution, as well as the equilibrium length of the admission game. We derive conditions on the availability of side-payments under which a union chooses to delay the admission of admissible countries. We show that the observed sequencing of admissions to the European Union is not consistent with the existence of perfectly competitive markets to price the admission of candidate countries. Welfare implications are derived.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1997085.
Date of creation: 01 Nov 1997
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Admission paths; partition function; side-payments; European integration;
Other versions of this item:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- F15 - International Economics - - Trade - - - Economic Integration
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- Kóczy,László Á., 2005. "Strategic Aspects of the 1995 and 2004 EU Enlargements," Research Memorandum 043, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- László Á. Kóczy, 2001. "Accession Games: A Dynamic Per-Member Partition Function Aapproach," Game Theory and Information 0111002, EconWPA.
- Laszlo A Koczy, 2000.
"The Core of a Partition Function Game,"
Center for Economic Studies - Discussion papers
ces0025, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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