Ludwig von Mises Institute

About: Ludwig von Mises Institute is a based out in . It is known for research contribution in the topics: Entrepreneurship & Austrian School. The organization has 25 authors who have published 134 publications receiving 2488 citations.

Opportunity Discovery, Entrepreneurial Action, and Economic Organization

Abstract: This paper reviews and critiques the "opportunity discovery" approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization, by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. I begin by distinguishing among occupational, structural, and functional approaches to entrepreneurship and distinguishing among two influential interpretations of the entrepreneurial function, discovery and judgment. I turn next to the contemporary literature on opportunity identification and argue that this literature misinterprets Kirzner's instrumental use of the discovery metaphor and mistakenly makes "opportunities" the unit of analysis. I then describe an alternative approach in which investment is the unit of analysis and link this approach to Austrian capital theory. I close with some applications to organizational form and entrepreneurial teams.

Entrepreneurship, Subjectivism, and the Resource-Based View: Towards a New Synthesis

Abstract: This paper maintains that the consistent application of subjectivism helps to reconcile contemporary entrepreneurship theory with strategic management research in general, and the resource-based view in particular. The paper synthesizes theoretical insights from Austrian economics and Penrose's (1959) resources approach, arguing that entrepreneurship is inherently subjective and firm specific. This new synthesis describes how entrepreneurship is manifested in teams, and is driven by both heterogeneity of managerial mental models and shared team experiences.

New Institutional Economics

Abstract: This essay surveys the new institutional economics, a rapidly growing literature combining economics, law, organization theory, political science, sociology, and anthropology to understand social, political, and commercial institutions. This literature tries to explain what institutions are, how they arise, what purposes they serve, how they change, and how they may be reformed. Following convention, I distinguish between the institutional environment (the background constraints, or rules of the game that guide individuals' behavior) and institutional arrangements (specific guidelines designed by trading partners to facilitate particular exchanges). In both cases, the discussion here focuses on applications, evidence, and policy implications.

The Make-or-Buy Decision: Lessons from Empirical Studies

Abstract: Should a firm make its own inputs, buy them on the spot market, or maintain an ongo- ing relationship with a particular supplier? The emergence of the transaction cost approach to vertical integration in the 1970s and 1980s generated a substantial body of empirical research on vertical firm boundaries and related issues in contracting and organizational design. This chapter reviews the empirical literature on the make-or-buy decision, focusing on the transaction cost approach. After reviewing the Coasian or "contractual" approach to vertical integration I summa- rize the most common empirical strategies, highlighting current controversies over data and methods, sample selection, and related issues. I next provide a sampler of evidence on compo- nent procurement, forward integration into marketing and distribution, contractual design, and the use of informal agreements. Finally, I discuss outstanding challenges and directions for fu- ture research, focusing on the measurement and definition of key variables, the role of asset specificity, the comparison of rival explanations, causality, and the effects of the legal and regu- latory environment.

A Theory of Entrepreneurship and Institutional Uncertainty

Abstract: Uncertainty and institutions are each vital concepts in entrepreneurship research. However, little work has been done to combine them into a consistent conceptual framework for analyzing the dynamic aspects of entrepreneurial action, uncertainty, and institutional change. Using insights from new institutional economics, we develop a model that explains the institutional uncertainty resulting from conflicts between institutions on different “levels” of social activity. We further explain how entrepreneurs can both cause and mitigate this uncertainty through market and institutional action. Finally, we focus on a special case of institutional uncertainty, “regime uncertainty”, wherein entrepreneurs are left without reliable means to overcome uncertainty in political institutions.