Entrepreneurship and the Economic Theory of Markets

Mark Casson

Foundations and Trends(R) in Entrepreneurship, 2025, vol. 21, issue 2, 88-171

Abstract: Entrepreneurship studies has an uneasy relationship with mainstream economics. This monograph attempts to bridge the gap by presenting a formal mathematical theory of entrepreneurship, focusing on competing entrepreneurs operating in a segmented market. The entrepreneur is modelled as an innovative market-maker, discovering opportunities for trade. Each market segment is characterised by a maximum price that customers are willing to pay, and a quantity that they are willing to buy at that maximum price. The model can solve for the outcome of complicated market structures using a simple technique, namely linear programming.A remarkable feature of the model is that it re-ignites historic debates in mainstream economic theory that have never been fully resolved, and are largely ignored in contemporary economic literature. It shows that markets normally have two prices-not one– namely a wholesale price and a retail price-and that, owing to segmentation, prices are not normally uniform but dispersed. The mathematical model is sufficiently simple that it does not require calculus, and the method of solution is so straightforward that the requisite techniques can be freely accessed on a laptop.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1561/0300000134 (application/xml)

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:now:fntent:0300000134

Access Statistics for this article

More articles in Foundations and Trends(R) in Entrepreneurship from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().