Abstract

Empirical evidence indicates that entrepreneurial activities tend to concentrate geographically. Strategic complementarities, knowledge spillovers and network externalities are regarded as the principal sources of such phenomena. Although conspicuous examples point at the presence of positive feedback mechanisms, agglomerations also occur in the absence of these features and in areas of considerably homogeneous economic potential. We build an evolutionary game theoretic model to investigate the conditions under which regions may evolve different rates of entrepreneurship assuming that (i) regions are economically similar, (ii) there is migration between regions, and (iii) individuals are predisposed to imitate others who are economically more successful.

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