Entrepreneurship, discovery and search

Shinji Teraji

Journal of Behavioral Economics for Policy, 2021, vol. 5, issue S1, 73-81

Abstract: This paper analyzes the theory of the firm by clarifying the relationship between Israel Kirzner's notion 'discovery' and Herbert Simon's notion 'search.' In the problem of ignorance, the paper argues how Kirznerian entrepreneurship differs from Simonian entrepreneurship. Kirzner emphasizes the quality of perception for recognizing a profit opportunity, while Simon emphasizes the search for possibilities. In the paper, ignorance can be classified into two categories: 'lack of information' and 'lack of awareness.' The former is attributable to scarce knowledge in an organization. Agents in search activities know the extent of their ignorance and can be informed about the missing information. On the other hand, the latter corresponds to unnoticed opportunities in the market. Discovery is always accompanied by surprise in disequilibrium where agents are ignorant and are often ignorant of their ignorance. Discovery replaces ignorance with newly identified feasible states.

Keywords: entrepreneurship; ignorance; discovery; search (search for similar items in EconPapers)
JEL-codes: B25 B41 D90 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://sabeconomics.org/journal/RePEc/beh/JBEPv1/articles/JBEP-5-S1-6.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:beh:jbepv1:v:5:y:2021:i:s1:p:73-81

Access Statistics for this article

Journal of Behavioral Economics for Policy is currently edited by Michelle Baddeley

More articles in Journal of Behavioral Economics for Policy from Society for the Advancement of Behavioral Economics (SABE) Contact information at EDIRC.
Bibliographic data for series maintained by SABE ().