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Let's do it Frank's way: general principles and historical specificity in the study of entrepreneurship

Published online by Cambridge University Press:  22 March 2021

Marek Hudik Open the ORCID record for Marek Hudik [Opens in a new window]  and
Per L. Bylund Open the ORCID record for Per L. Bylund [Opens in a new window]
Marek Hudik*
Affiliation:
Faculty of Business Administration, Prague University of Economics and Business, Prague, Czechia
Per L. Bylund
Affiliation:
School of Entrepreneurship, Spears School of Business, Oklahoma State University, Stillwater, OK, USA
*
*Corresponding author. Email: [email protected]
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Abstract

Formal economic models of entrepreneurship have two characteristics: they model entrepreneurship as an allocation of resources, and they identify common factors affecting this allocation. These common factors are represented as parameters of optimization models, and they are evaluated at the market level. We argue that although these models are useful, they are incomplete because certain aspects of entrepreneurial behavior, such as judgment, alertness, or innovativeness, cannot be easily transformed into allocative problems. Moreover, entrepreneurial acts involve idiosyncratic elements, which limit the applicability of the market-level analysis to individual cases. Thus, the traditional economic methods have to be complemented by approaches highlighting the role of individual and historical specificity. The study of entrepreneurship, therefore, requires a synthesis of both general theory and historicist approaches, as envisioned a century ago by Frank Knight.

Keywords

EntrepreneurshipFrank Knightgeneral theoryhistorical specificityhistoricismprice theoryB41B31B52L26
Type
Research Article
Information
Journal of Institutional Economics , Volume 17 , Special Issue 6: Special Issue on the Centenary of Frank H. Knight's Risk, Uncertainty, and Profit , December 2021 , pp. 943 - 958
Copyright
Copyright © Millennium Economics Ltd 2021

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