This book organizes entrepreneurship theory in a way that constitutes a new body of knowledge, which is Informational Entrepreneurship. It can serve as a basis for teaching entrepreneurship and reducing performance uncertainty. Although entrepreneurship is not entirely about information, information determines how it can be systematically understood while depending less on luck. It also offers the only known, experimentally tested approach that incorporates decision support tools. Other known approaches rely on exposition for validation; whereas, Informational Entrepreneurship uses two-sample experiments that controlled for other explanations as well as experimenter bias. It will appeal to those studying and teaching entrepreneurship who are looking for a prescriptive approach, rather than a descriptive approach.
Author(s): James O. Fiet
Publisher: Palgrave Macmillan
Year: 2022
Language: English
Pages: 352
City: Cham
Acknowledgments
Prologue
Contents
List of Figures
List of Tables
List of Boxes
1 Successful Anomalies
Prescription Versus Description
Discovering the Rules
Wealth and Specific Information
Are Resources Really Necessary?
Resources, Market Failure, and Information
Lacking Social Capital and Resources
Environmental Complications
A New Way Forward
Chapter Summary for Entrepreneurs
References
2 Positioning in Time and Space
The Routinization of the Discovery Process
Search Routines
Key Elements of Routine Activity Theory
Space or Place
Time or Timing
The Routineness of Constrained, Systematic Search
Entrepreneurial Positioning
Spatial-Temporal Positioning
A Notation for Entrepreneurial Positioning
The Outside Limits of Entrepreneurial Positioning
Space–Time Prisms
A Skewed Space–Time Prism
Notational Advantages
Structural Implications for Entrepreneurship
Comparing Boundary Conditions with Structural Features
Formal Notational System
Chapter Summary for Entrepreneurs
References
3 Informational Entrepreneurship
Entrepreneurial Discoveries
The Economics of Discovery
The Neoclassical View
The Austrian View
Toward an Information-Based Model of Entrepreneurial Discovery
Public or Private Markets
The Role of Signaling
The Role of Risk Evaluation in Entrepreneurial Discovery
The Role of Previous Experience
Entrepreneurial Roles in Discovery
Entrepreneurs as Investors in Specific Signals
Implications for Research, Training, and Aspiring Entrepreneurs
Chapter Summary for Entrepreneurs
References
4 Estimating Wealth Potential
Wealth Creation as the Outcome of Entrepreneurship
Characteristics of High Potential Venture Ideas
A Framework for Evaluating Venture Ideas
Fit
Value
Moderators
Explaining the Protection Afforded by Moderators
Rarity
Inimitability
Methodology
The Algorithm
Data Collection
Results
Implications
Entrepreneurs and Investors
Public Policy Analysis
Scholars
Future Research
Chapter Summary for Entrepreneurs
Appendix: A Data Collection Instrument for Measuring and Predicting Wealth Creation
References
5 A Formal Proof of Informational Entrepreneurship
Modeling a Search
The Role of Information
Received Search Theories
Neoclassical Perspectives on Search
Austrian Perspectives on Search
Organizational Behavior Perspectives on Search
Summary of Current Perspectives on Search
An Information-Based Theory of Entrepreneurship
Information Channels
Consideration Sets
Modeling How to Search
A Formal Model for Determining a Maximal Search Sequence
An Example to Illustrate a Maximal Search Sequence
Options for Terminating a Search
Modeling When to Stop Searching
The Probability of Making a Discovery
Search Costs
Unlimited Resources with No Budget Constraints
Limited Resources with a Budget Constraint
Both a Budget and a Probability Constraint
An Example to Illustrate Criteria for Terminating a Search
Implications
Chapter Summary for Entrepreneurs
References
6 The Science of What Is Possible
Key Ideas
The Experimental Background
Information
The Developing Role of Information in Entrepreneurship
A Theoretical Basis for Search
Extending Informational Entrepreneurship
The Traditional Boundary of the Economics of Information
Introducing a New Construct to Informational Economics
Specific Knowledge and Information
Wealth-Generating Ideas
Methodology
Instructions for the Treatment Group Using Constrained, Systematic Search
Instructions for the Control Group Using Alertness
Recording and Evaluating Journal Entries
Instructions for the Treatment Group Using Consideration Sets
Instructions for the Control Group Using Entrepreneurial Alertness
Results
MBA Students
The Working Poor
Technically Trained Employees
Implications
Pedagogical Implications
Implications for Future Research
Chapter Summary for Entrepreneurs
Appendix: The Training Protocols for the Three Experiments
Information About Personal Accomplishments
How to Analyze Your Chart of Accomplishments
References
7 Preventing Bias in Testing
Scholarly Reactions to Constrained, Systematic Search
A Stepwise Process for Implementing Systematic Search
Empirical Evidence
MBA Students
The Inner-City Working Poor
Technically Trained Employees
Summary of Experimental Trials
Methodology
Rationale for Statistical Testing
Trial-Level Estimates
Fixed and Random Effects
Heterogeneity Among Trials
Individual-Level Estimates
Implications
Summary
Theory
Practice
Future Research
Conclusion
Chapter Summary for Entrepreneurs
References
8 Arbitrage Using Windows of Opportunity
From Action to Opportunity
From Opportunity to Analysis
Negotiating for a Window of Opportunity
Structuring the Deal and Validating the Opportunity
The Informational Entrepreneurship of Deal Making
Conventions
Chapter Summary for Entrepreneurs
References
9 Forgiving Business Models
The Beginning of It All
Opportunities—Some More Risky Than Others
Resource Suppliers and Providers
Forgiving Business Models
The Rationality of Resource Providers
Entrepreneurs and Markets
Market Inefficiency
Market Interaction Costs for Resource Providers
Time
Search Costs
An Entrepreneur’s Assumptions About the Future
Risk Aversion
Asymmetric Information
The Cost of Market Interaction
Outside Options for Resource Providers
Where from Here?
Many Outside Options and Low Market Interaction Costs
Few Outside Options and High Market Interaction Costs
Few Outside Options and Low Market Interaction Costs
Implications for Entrepreneurs
Theoretical Implications
Conventional Theories of Risk Shifting
The Use of Forgiving Business Models
The Case for Resources
Limitations
Future Research
Chapter Summary for Entrepreneurs
References
10 Cooperative Arrangements
Paradoxical Cooperation
Searching for Innovation
The Impetus for This Research
Governance Mechanisms
Constrained, Systematic Search
Opportunity, Governance Devices, and the Advantages of Human and Social Capital
Opportunity Discovery by Cooperating and Noncooperating Entrepreneurs
The Basics of Constrained, Systematic Search
Epistemic Structures
Structural Knowledge Differences Between Cooperative and Solo Entrepreneurs
The Epistemic Structure of Cooperative Search
The Continuity of Epistemic Structures
Constrained Systematic Search and Entrepreneurial Cooperation
Combinative Capabilities
Managing Windows of Opportunity
Improving Opportunity Identification Over Time
End Game Scenarios
End Game Scenarios in Cooperative Ventures
What Are We to Surmise?
Limitations
Implications for Theory and Practice
Conclusion
Chapter Summary for Entrepreneurs
References
11 Wealth Accumulation
Market Opportunities
Market Imperfections
Market Efficiency
Rational Sources of Financing
Savings and Investment
An Investment Plan
How Entrepreneurs Can Become Financially Independent
Mathematics Really Can Be an Entrepreneur’s Friend
Chapter Summary for Entrepreneurs
References
12 A Challenge for the Field
Massively Misinformed
Big Questions
A Guarantee
Systematic Performance Improvement
Early Experiences Without Theory
More Big Questions
Losing Our Way
Truth and Theory
The Challenge
Informational Entrepreneurship
References
Epilogue
Index
