A Model of Imitative Behavior in the Population of Firms and Workers

We study an imitation game of strategic complementarities between the percentage of high-skilled workers and innovative firms, namely, human capital and R&D, respectively. We show that this model has two pure Nash equilibria, one of them with high investment in R&D and skilled workers while the other one, which we interpret as poverty trap, exhibits lack of skills and underinvestment. Furthermore, we show that we can avoid the poverty trap if the number of innovative firms is larger than a threshold value allowing an increment of the number of skilled workers