PREVIEW
WEEK 1- Foss et al. Chapter 2: Classical economics make strong assumptions, such as perfect knowledge, rational behavior and equilibria. Austrian Economics instead seeks to understand
value, prices, and other economic facts as they exist in the world, rather than how they might behave under highly abstract or unrealistic assumptions and formal models, such as long-run
equilibria, rational behavior and perfect knowledge. Austrian School highlights: Methodological individualism: The behavior of individuals is seen as independent of the community.
importance of uncertainty and subjectivity of value and entrepreneurial decision-making (over time and across places), and tacit and dispersed knowledge, heterogeneity of capital.
Individual actions are used to explain social phenomena. Chapter 3: Market as a “dynamic process in which individuals use the price system to coordinate their actions and improve welfare
over time”. Entrepreneur is a key agent, and entrepreneurial judgement aligning with consumers’ preferences a key talent. Judgement: “the need for individuals to make decisions about the
future without access to a formal model or decision rule, as would apply to situations of “rational” behavior under probabilistic risk”. There are several research stream's view on the
entrepreneur. Occupational theories (beroeps): define entrepreneurship as self-employment and treat the individual as the unit of analysis. (keuze loon en ondm) Structural approaches treat
the firm or industry as the unit of analysis, defining the "entrepreneurial firm" as a new or small firm or a particularly Innovative firm. Functional theories view entrepreneurship as a series of
actions, or as a process, rather than an outcome like launching a start-up company (alertness to opportunities; "more the causes of success in general are studied, the larger is found the
element of choice, the smaller that of luck". The judgement-based approach: judgment-based approach begins with the subjective values and knowledge of individual entrepreneurs and
examines the way they inform action and decision-making as they attempt to successfully navigate a complex and uncertain environment. Elert e.a. (2019) why entrepreneurship?: The
entrepreneur is the key to innovation and growth. Wennekers & Thurik (1999): The objective of this article is to synthesize disparate strands of literature in order to link entrepreneurship to
economic growth. “Entrepreneurship is the manifest ability and willingness of individuals, on their own, in teams, within and outside existing organizations, to – perceive and create new
economic opportunities (new products, new production methods, new organizational schemes and new product market combinations) and to introduce their ideas in the market, in the face
of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions.” Subjectivism: Tastes and preferences differ both between individuals
and for the same person over time, and the basic architecture of choice includes many subjective elements. Tacit and Dispersed Knowledge: knowledge is also "tacit" (understood without
expressly stated) and "subjectively held." Thus, the knowledge that matters for economic decisions is mostly idiosyncratic (different per individual). Because of this, individuals typically
interpret "the same" information differently. The common principles underlying all proposals for the entrepreneurial society are: Neutrality: we wish to level the playing field between
entrepreneurs and those they challenge. Transparency: operating in such a way that it is easy for others to see what actions are performed and what consequences they will entail.
Moderation: policymakers should be modest in extracting and allocating resources lest such measures become costly to reverse. Contestability: all vested positions, opinions, and truths
should be open to challenge and debate. Legality: legality ensures the rule of law is both upheld and aligned with the institutional framework. Justifiability: the appropriate balancing of
public and private interests that is needed to justify policy interventions.
WEEK 1- Foss et al. Chapter 2: Classical economics make strong assumptions, such as perfect knowledge, rational behavior and equilibria. Austrian Economics instead seeks to understand
value, prices, and other economic facts as they exist in the world, rather than how they might behave under highly abstract or unrealistic assumptions and formal models, such as long-run
equilibria, rational behavior and perfect knowledge. Austrian School highlights: Methodological individualism: The behavior of individuals is seen as independent of the community.
importance of uncertainty and subjectivity of value and entrepreneurial decision-making (over time and across places), and tacit and dispersed knowledge, heterogeneity of capital.
Individual actions are used to explain social phenomena. Chapter 3: Market as a “dynamic process in which individuals use the price system to coordinate their actions and improve welfare
over time”. Entrepreneur is a key agent, and entrepreneurial judgement aligning with consumers’ preferences a key talent. Judgement: “the need for individuals to make decisions about the
future without access to a formal model or decision rule, as would apply to situations of “rational” behavior under probabilistic risk”. There are several research stream's view on the
entrepreneur. Occupational theories (beroeps): define entrepreneurship as self-employment and treat the individual as the unit of analysis. (keuze loon en ondm) Structural approaches treat
the firm or industry as the unit of analysis, defining the "entrepreneurial firm" as a new or small firm or a particularly Innovative firm. Functional theories view entrepreneurship as a series of
actions, or as a process, rather than an outcome like launching a start-up company (alertness to opportunities; "more the causes of success in general are studied, the larger is found the
element of choice, the smaller that of luck". The judgement-based approach: judgment-based approach begins with the subjective values and knowledge of individual entrepreneurs and
examines the way they inform action and decision-making as they attempt to successfully navigate a complex and uncertain environment. Elert e.a. (2019) why entrepreneurship?: The
entrepreneur is the key to innovation and growth. Wennekers & Thurik (1999): The objective of this article is to synthesize disparate strands of literature in order to link entrepreneurship to
economic growth. “Entrepreneurship is the manifest ability and willingness of individuals, on their own, in teams, within and outside existing organizations, to – perceive and create new
economic opportunities (new products, new production methods, new organizational schemes and new product market combinations) and to introduce their ideas in the market, in the face
of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions.” Subjectivism: Tastes and preferences differ both between individuals
and for the same person over time, and the basic architecture of choice includes many subjective elements. Tacit and Dispersed Knowledge: knowledge is also "tacit" (understood without
expressly stated) and "subjectively held." Thus, the knowledge that matters for economic decisions is mostly idiosyncratic (different per individual). Because of this, individuals typically
interpret "the same" information differently. The common principles underlying all proposals for the entrepreneurial society are: Neutrality: we wish to level the playing field between
entrepreneurs and those they challenge. Transparency: operating in such a way that it is easy for others to see what actions are performed and what consequences they will entail.
Moderation: policymakers should be modest in extracting and allocating resources lest such measures become costly to reverse. Contestability: all vested positions, opinions, and truths
should be open to challenge and debate. Legality: legality ensures the rule of law is both upheld and aligned with the institutional framework. Justifiability: the appropriate balancing of
public and private interests that is needed to justify policy interventions.
