MENDEZ, FABIO; SEPULVEDA, FACUNDO - In: Hitotsubashi Journal of Economics 54 (2013) 1, pp. 51-77
We study an economy where agents are heterogeneous in entrepreneurial ability, and may decide to become workers or entrepreneurs. The government is motivated by a production externality to impose regulations on entrepreneurship, and sets a level of red tape to test regulation compliance. In an...