Evolutionary Game Analysis of the Choice to Become Entrepreneur

Zheng Li Jilin University, China

Tsvi Vinig University of Amsterdam, The Netherlands

Abstract
This paper addresses one of the core questions in developing entrepreneurship theory, i.e. why and when do some choose to become entrepreneurs. Differing from other research efforts on it, we look at entrepreneurial decision making as population behavior and the individuals’ strategy of human capital investment to realize latent ability constrained by certain environmental context. Assuming that individuals with/without latent innovative or/and entrepreneurial ability might make corresponding human capital investment and become different kind of employees or entrepreneurs, we bring forward an evolutionary stable model of the individuals ’ entrepreneurial human capital investment from the society lay. We further develop an evolutionarily game model of the individuals’ human capital investment decisionmaking from the point of those who would be an entrepreneur applying replicator dynamics equation. The analysis and calculation result of the models show that entrepreneurship is contingent upon environmental context, there will be different entrepreneurial distribution when individuals are aware of their latent ability or not, and a government can always improve the entrepreneurial level via paying more attention to education and changing the environmental context.

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Reference:	Li, Z., Vinig, T. (2004). "Evolutionary Game Analysis of the Choice to Become Entrepreneur," University of Amsterdam, Netherlands . Sprouts: Working Papers on Information Systems, 4(14). http://sprouts.aisnet.org/4-14
Keywords:	Entrepreneurship, Evolutionary game theory, Human capital
Item Type:	Article - Volume 4 Article 14 (2004)
Language:	English
Email:	Tsvi Vinig (g.t.vinig@uva.nl)

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