Economic integration as a partition function game

Massimo Morelli () and Philippe Penelle ()
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Philippe Penelle: The Irving B.Harris Graduate School of Public Policy Studies, The University of Chicago

No 1997085, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This 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.

Keywords: Admission paths; partition function; side-payments; European integration (search for similar items in EconPapers)
JEL-codes: C7 F15 (search for similar items in EconPapers)
Date: 1997-11-01
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Citations: View citations in EconPapers (5)

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Working Paper: Economic Integration as a Partition Function Game (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997085

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