Regional concentration of entrepreneurial activities

Entrepreneurial agglomerations often feature positive feedback mechanisms such as strategic complementarities, knowledge spillovers and network externalities. However, they can also occur in the absence of these mechanisms, even across regions of considerably homogeneous economic potential. We analyze a market entry game in an evolutionary setup to investigate how two economically similar regions may evolve different rates of entrepreneurship under the assumption that there is migration between them, and that individuals are predisposed to imitate others who are economically more successful. We examine the long run dynamics of this model and assess the impact of the economic, social and demographic exchange on the regional concentration of entrepreneurial activities.