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The main contribution of this paper is the development and application of cryptographic techniques to the design of strategic communication mechanisms. One of the main assumptions in cryptography is the limitation of the computational power available to agents. We introduce the concept of limited computational complexity, and by borrowing results from cryptography, we construct a communication protocol to establish that every correlated equilibrium of a two-person game with rational payoffs can be achieved by means of computationally restricted unmediated communication. This result provides an example in game theory where limitations of computational abilities of players are helpful in solving implementation problems. More specifically, it is possible to construct mechanisms with the property that profitable deviations are too complicated to compute.

The claim of this paper is that an entrepreneur's human capital constitutes a key determinant of the survival time of new service industry companies created in Spain. To confirm this claim, a series of survival models has been specified and estimated for a sample of 237 Spanish service industry companies founded by one or more entrepreneurs between the years 2000 and 2004. We found that (1) both general and specific human capital have a positive impact on the survival time of a new firm and (2) human capital is accumulative, in the sense that the larger the number of entrepreneurs founding the company, the longer its survival time. We find that the specific aspects of human capital that are determinants of a company's survival time are gender, previous work experience in the same activity or as the owner of a firm, and the number of partners. However, educational and training characteristics do not play a relevant role as regards a firm's survival time. These facts suggest the presence of a gap between the objectives and results of current entrepreneurial-oriented training in Spain.Entrepreneurship is a major driver of innovation, competitiveness and growth. Due to their strong presence in key sectors such as services and professional activities, smaller enterprises and entrepreneurs today play a central role in the economy. A positive and robust correlation between entrepreneurship and economic performance has been found in terms of growth, firm survival, innovation, employment creation, Int Entrep Manag J (

This paper analyzes the role played by two dimensions of entrepreneurs' private social capital in the survival, growth and innovativeness of entrepreneurial service ventures: local size and preferential attachment degree. We build a bi-dimensional measure of social capital based on network models and a methodology to estimate this measure for any group of entrepreneurs. Based on a survey of service entrepreneurs who launched their business in the city of Shanghai, we show that roles played by each dimension are quite different. A large local size of the network increases the chances of survival of the new venture. However, the chance to become a dynamic venture is only related to entrepreneurs' preferential attachment degree. This finding has relevant political and managerial implications.