Modern Theories of Entrepreneurial Behavior: A Comparison and Appraisal

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dc.contributor.author Endres, Anthony en
dc.contributor.author Woods, Christine en
dc.date.accessioned 2012-03-28T00:55:39Z en
dc.date.issued 2006 en
dc.identifier.citation Small Business Economics 26(2):189-202 2006 en
dc.identifier.issn 0921-898X en
dc.identifier.uri http://hdl.handle.net/2292/15758 en
dc.description.abstract This paper compares and appraises three principal, contemporary theories of entrepreneurial decision making – neoclassical, Austrian and behavioral. We employ theory appraisal criteria made available in Fritz Machlup’s (1967) celebrated article on alternative theories of the firm. The paper considers theories that treat sequences of behavior by which individual entrepreneurs reach decisions on two levels: the discovery of profit opportunities and their exploitation. We also consider how each theory characterizes the entrepreneur’s decision making process by contrast with the posited behavior of other economic agents. Austrian theory is suited to explaining novel, adventurous behavior at the discovery stage. The algorithm for opportunity exploitation in both the neoclassical and Austrian approaches is a single-repertoire, optimization rule. Neoclassical theory is situated in frictionless, atomistic Walrasian markets and emphasizes mathematical tractability. Austrian and behavioral theories conceive entrepreneurial acts taking place in market processes understood as complex institutional phenomena. There are strong theoretical complementarities between Austrian and behavioral approaches; both approaches value descriptive accuracy, though the behavioralists place more weight on operational tractability. Austrians and behavioralists share an interest in heuristics; they emphasize the role of prior micro-level knowledge at the discovery stage. Therefore more collaborative research in future between Austrians and behavioralists should prove fruitful. en
dc.publisher Springer Verlag en
dc.relation.ispartofseries Small Business Economics en
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher. Details obtained from: http://www.sherpa.ac.uk/romeo/issn/0921-898X/ en
dc.rights.uri https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htm en
dc.title Modern Theories of Entrepreneurial Behavior: A Comparison and Appraisal en
dc.type Journal Article en
dc.identifier.doi 10.1007/s11187-004-5608-7 en
pubs.issue 2 en
pubs.begin-page 189 en
pubs.volume 26 en
dc.rights.holder Copyright: Springer Verlag en
pubs.end-page 202 en
pubs.publication-status Published en
dc.rights.accessrights http://purl.org/eprint/accessRights/RestrictedAccess en
pubs.subtype Article en
pubs.elements-id 111325 en
dc.relation.isnodouble 133 *
pubs.org-id Business and Economics en
pubs.org-id Management & Intl Business en
pubs.record-created-at-source-date 2010-09-01 en


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