An agent-based model of entrepreneurship

Graham D. Newell and Matthew Holian

Journal of Entrepreneurship and Public Policy, 2017, vol. 6, issue 2, 259-270

Abstract: Purpose - The purpose of this paper is to develop an agent-based model that highlights the role of entrepreneurship in the market process. Design/methodology/approach - The authors explore the effect of entrepreneurial alertness and transaction costs on two normative standards: the speed of price equilibration and the level of product diversity. Findings - Both higher alertness and lower transaction costs lead to faster equilibration, as expected. High alertness contributes to high product diversity, also as expected. However, and counter-intuitively, lower transaction costs actually leads to lower levels of product diversity, as markets equilibrate before entrepreneurs can discover many new products. Originality/value - The analysis provides new insight into entrepreneurship theory and policy.

Keywords: Entrepreneurial action; Research methods; Economic theory (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jepppp:jepp-01-2015-0003

DOI: 10.1108/JEPP-01-2015-0003

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