Union Integration Paths

This paper proposes a theoretical explanation for the incremental integration path of Europe until the Monetary Union time. The dynamic partition function game suggests that the presence of externalities across coalitions affects the timing of admission of different players, the equilibrium coalition structure,and the equilibrium length of the admission game. In particular, at the early stages of integration it is reasonable to believe that the bargaining power of the founders was not so high as to make the admission process resemble a sequential ultimatum game, and in such a context the admission path is always a sequencing admission path 1