The Value of Entrepreneurial Failures: Task Allocation and Career Concerns

@inproceedings{Canidio2016TheVO,
  title={The Value of Entrepreneurial Failures: Task Allocation and Career Concerns},
  author={Andrea Canidio and Patrick Legros},
  year={2016}
}
Entrepreneurs are free to work on tasks that are likely to fail but generate learning about their comparative advantage at different tasks. The same level of learning can be achieved within firms if and only if labor-market frictions are high. When labor-market frictions are low, entrepreneurial failures breed entrepreneurial successes and failed entrepreneurs are rewarded when re-entering the labor market. The opposite holds when labor-market frictions are large. These results are consistent… CONTINUE READING

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