Membership amidst Lack of Confidence A Game-Theoretic Case of British Membership in the EEC

초록

This paper establishes how a potential member state comes to join a supranational entity in a setting where the former appears to have conflicts with the latter. Unless a state seeking a membership in an entity is convinced that the entity is absolutely unwilling to accommodate the state, the former finds it advantageous to be participatory because such a choice will be responded by an entity`s accommodating move. To be specific, if a state leaves possibilities open to the event that an entity is generous, both players will Iikely form a friendly relationship: that is, an entity makes a generous play and a state considering joining an entity acts in a participatory manner. They, in fact, make a strategic use of a state`s lack of confidence for a mutually beneficial purpose: A nonexpansionary entity gains by acting generous as long as a membership-seeking state, who updates beliefs in the Bayesian manner, is not convinced for sure of the entity`s characteristic. The sequential equilibrium of this bounded rationality model is unique, and as such a state without confidence in an entity`s generosity can still be expected to participate in the entity. This sheds an elucidating light on the British membership in the EEC.