Oligopoly, Strategy and the European Union

N. Lygeros

Translated from the Greek by Athena Kehagias




Regardless of the substance of the European Union, it's structure can be described as an oligopoly, as it consists of a small number of members that are highly interdependent.
Generally, oligopolistic fields go through various stages such as emergence, growth, maturity and decline. However we examine the situation, the European Union is in the second stage, this is at least what is obvious with the new accessions.
The high uncertainty of the initial steps is not there anymore, as we see it with the implementation of the monetary union and currency stability.
Of course, a solid total oligopolistic model does not exist but only tendencies and it is important for us to know them if we want to know where we are going.
A general trend is the production of alliances. This explains the existence of the institutionalization of the concept of the lobby in the European Union, but not only there , since there are state alliances.
The objective advantages are obvious: increased profits, muted uncertainty and better abbility to control the entry of new members. And these elements are particularly important at this critical period because some committees and parties within the European Union give the impression that they are ignorant. Because it is the oligopoly that gives the tone of the negotiations and not the candidates. While we saw with the Iraqi war how the Franco-German axis had encountered some member states and candidates. Moreover, before taking an important decision we should have in mind that partnerships are often difficult to maintain because after the agreement, everyone can increase profits in breach of the agreement, something that can be expected based on the recent report of the Committee membership.
The other trend that we need to know about is related to sovereignty. Firstly, there is the issue of leadership that is untertaken by the core that virtually could be a complex and secondly, the dominant strategy that does not exist at all the actions for every member, but in the particular case we don't have a need of a general theorem as we deal only the core and because in the European context veto gives this abillity to all Member States, irrespective of their size.
Furthermore, if there is a possibility of cost, this strategy can be converted into another which belongs to a Na sh equilibrium . Therefore, what is important for the European Union is the option of Nash equilibrium and not a revision of the oligopoly ,so it could be applied to the capricious behavior of the application.
Game theory and the notion of oligopoly not only consit of theoretical knowledge, but are also offering practical solutions in a region where the political element is only an illusionary difficulty.
The strategic solution exists, the problem is it's implementation.







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