Two key mechanistic possibilities for group 10 transition metal [M(η³-allyl)(PMe₃)]⁺ catalyzed (where M = Ni(II), Pd(II) and Pt(II)) ethylene dimerization are investigated using density functional theory methods. The nature of the potential active catalysts in these pathways is analyzed to gain improved insights into the mechanism of ethylene dimerization to butene. The catalytic cycle is identified as involving typical elementary steps in transition metal-catalyzed C–C bond formation reactions, such as oxidative insertion as well as β-H elimination. The computed kinetic and thermodynamic features indicate that a commonly proposed metal hydride species (L_nM–H) is less likely to act as the active species as compared to a metal–ethyl species (L_nM–CH₂CH₃). Of the two key pathways considered, the active species is predicted to be a metal hydride in pathway-1, whereas a metal alkyl complex serves as the active catalyst in pathway-2. A metal-mediated hydride shift from a growing metal alkyl chain to the ethylene molecule, bound to the metal in an η² fashion, is predicted to be the preferred route for the generation of the active species. Among the intermediates involved in the catalytic cycle, metal alkyls with a bound olefin are identified as thermodynamically stable for all three metal ions. In general, the Ni-catalyzed pathways are found to be energetically more favorable than those associated with Pd and Pt catalysts.