Entrepreneurs and the Entrepreneurial Function: A Commentary

TLDR: In this paper, the authors investigate why economic theory has avoided the topic of entrepreneurship and propose a framework for classifying analytic approaches to entrepreneurship, and identify four levels of entrepreneurship analysis: the entrepreneur as a profit-maximizing decision-maker with full relevant information; entrepreneur as one who possesses certain personal characteristics such as boldness or acumen; a market consequences approach that superimposes entrepreneurial activity on an equilibrium market model; and a market consequence approach that does not presume a background equilibria.

Abstract: Investigates why economic theory has avoided the topic of entrepreneurship and proposes a framework for classifying analytic approaches to entrepreneurship The absence of the entrepreneur in modern economic theory is explained by the fact that the marketplace agitation brought about by entrepreneurial activity is precisely the element from which it is necessary for economic analysis to abstract Walrasian equilibrium analysis is compared to the work of Schumpeter to illustrate the possibility of an analytical approach that includes entrepreneurship Four levels of entrepreneurship analysis are identified: the entrepreneur as a profit-maximizing decision-maker with full relevant information; the entrepreneur as one who possesses certain personal characteristics such as boldness or acumen; a market consequences approach that superimposes entrepreneurial activity on an equilibrium market model; and a market consequences approach that does not presume a background equilibrium market model The first and second levels are rejected as being viable avenues for theoretical economic explanation and the author suggests that economists should pursue the implications, within market processes, of entrepreneurial activity, which entails developing theory at the third and fourth levels (CAR)