Learning to learn: Experimentation, entrepreneurial capital, and development

William Maloney and Andres Zambrano

No 19940, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This paper models an entrepreneur's choice between investing in a safe activity or experimenting with a new risky one, and how much to invest in entrepreneurial capital" that permits more effective use of arriving information on the latter- how much to learn how to learn. Optimal investment depends on the cost, the distance from the entrepreneurial frontier, and non-monotonically, on the expected return on the risky activity, leading to three learning regimes including a potential resource curse. The model is supported by historical evidence from Latin America and simulations of the relative decline of the Chilean versus US copper industries

Keywords: Learning; Experimentation; Entrepreneurial capital; Development; Resource curse (search for similar items in EconPapers)
JEL-codes: D81 O13 O31 O32 (search for similar items in EconPapers)
Pages: 56
Date: 2022-01-17
New Economics Papers: this item is included in nep-ent
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https://repositorio.uniandes.edu.co/bitstream/handle/1992/54321/dcede2022-02.pdf

Related works:
Working Paper: Learning to Learn: Experimentation, Entrepreneurial Capital, and Development (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:019940

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