Cheat sheet Economics of
Entrepreneurship ECB2ECE
Preview:
EEK 1: Foss et al. Chapter 2: Austrian Economics; Methodological individualism: The behavior of individuals is seen as independent of the community. Individual actions are used to
explain social phenomena. Subjectivism (subjectivisme): 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.
Uncertainty: Risk can be represented by chances (think repeated actions, insurance) uncertainty cannot be calculated in a chance. They represent the “unknown unknowns” of the
economic world. Heterogeneous capital: A realistic picture of the economic process presupposes a notion of capital heterogeneity. Chapter 3: the theory of Entrepreneurship; 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 ondrn) 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”.; Je moet zo goed mogelijk voldoen aan de wens
van de consument (consumer). The judgement-based approach: judgment-based approach begins with the subjective values and knowledge of individual entrepreneurs. The
government and institutions also influence entrepreneurial activity. Different rules support and incentivize different types of judgment. Depending on the prevailing institutional
setup (door overheid), entrepreneurship can be “productive” in the sense of promoting consumer welfare and wealth-creation, or it can be channeled into “unproductive” or
“destructive” activities such as rent-seeking and organized crime. Elert e.a. (2019) why entrepreneurship?: The entrepreneur is the key to innovation and growth. Schumpeterian
entrepreneurship: entrepreneurship is also a major ingredient in creating “the good life” for its citizens, which should be the goal of policymaking (creative destruction). How, then,
is the EU to become a more entrepreneurial society? 1) Entrepreneurs are both incentivez and constrained by society’s rules 2) institutions are path-dependent an complementary
3) Entrepreneurship contributes to prosperity by challenging the status quo in an open market, fair competition; Geschetst: ecosysteem waarvan ondernemers afhankelijk zijn om
succesvol te kunnen innoveren. Competition between various collaborative teams will bring about an evolution of collaborative innovation blocs. Samenwerking actoren verhoogt
succesvolle onderneming. 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. Wennekers & Turik table; Level analysis; individual, firm, macro; conditions entrepreneurship; psychological
endowments, culture institutions, business culture incentives, culture institution; crucial elements (attitudes, skills, action) (statrtups, entry new market, innovation) variety,
competition, selection)
Entrepreneurship ECB2ECE
Preview:
EEK 1: Foss et al. Chapter 2: Austrian Economics; Methodological individualism: The behavior of individuals is seen as independent of the community. Individual actions are used to
explain social phenomena. Subjectivism (subjectivisme): 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.
Uncertainty: Risk can be represented by chances (think repeated actions, insurance) uncertainty cannot be calculated in a chance. They represent the “unknown unknowns” of the
economic world. Heterogeneous capital: A realistic picture of the economic process presupposes a notion of capital heterogeneity. Chapter 3: the theory of Entrepreneurship; 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 ondrn) 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”.; Je moet zo goed mogelijk voldoen aan de wens
van de consument (consumer). The judgement-based approach: judgment-based approach begins with the subjective values and knowledge of individual entrepreneurs. The
government and institutions also influence entrepreneurial activity. Different rules support and incentivize different types of judgment. Depending on the prevailing institutional
setup (door overheid), entrepreneurship can be “productive” in the sense of promoting consumer welfare and wealth-creation, or it can be channeled into “unproductive” or
“destructive” activities such as rent-seeking and organized crime. Elert e.a. (2019) why entrepreneurship?: The entrepreneur is the key to innovation and growth. Schumpeterian
entrepreneurship: entrepreneurship is also a major ingredient in creating “the good life” for its citizens, which should be the goal of policymaking (creative destruction). How, then,
is the EU to become a more entrepreneurial society? 1) Entrepreneurs are both incentivez and constrained by society’s rules 2) institutions are path-dependent an complementary
3) Entrepreneurship contributes to prosperity by challenging the status quo in an open market, fair competition; Geschetst: ecosysteem waarvan ondernemers afhankelijk zijn om
succesvol te kunnen innoveren. Competition between various collaborative teams will bring about an evolution of collaborative innovation blocs. Samenwerking actoren verhoogt
succesvolle onderneming. 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. Wennekers & Turik table; Level analysis; individual, firm, macro; conditions entrepreneurship; psychological
endowments, culture institutions, business culture incentives, culture institution; crucial elements (attitudes, skills, action) (statrtups, entry new market, innovation) variety,
competition, selection)
