Complementarity and imitative behaviour int he populations of firms and workers

ACCINELLI, E. - LONDON, S. - CARRERA, E.

San Luis, Argentina

Congreso; Jornadas Latinoamericanas de Teoria Economica; 2008

Universidad Nacional de San Luis, IMASL

In this paper, we set up a model of the evolutionary game between .rms and potential workers with asymmetric information. This is a certain coordination game, and our model is one of replicator by imitation. There is strategic complementarity between the percentage of high-skill workers and innovative .rms, human capital and R&D, respectively. We show that this model has two pure rational Nash equilibria, one of them with high investment in R&D and high skill workers and, the other one with low characteristics, that is, the poverty trap. We show that we can avoid the poverty trap when the number of innovative .rms is larger than a threshold value and then, the number of high skill workers increases. We conclude that the participation of policy makers may have an important role to obtain the high-level equilibria.