An Economic Model of Strategic Entrepreneurship

47 Pages Posted: 15 May 2020

See all articles by Randall Edward Westgren

Randall Edward Westgren

University of Missouri at Columbia - Department of Applied Social Sciences

Robert Wuebker

University of Utah - David Eccles School of Business

Date Written: January 10, 2019

Abstract

How do new entrants create and capture value in established industries? Starting from the foundations of neoclassical economics we model entrepreneurial entry and competition as occurring simultaneously in production technology space and product attribute space. Our model’s central feature is to dis-aggregate entrepreneurial rents into four components: arbitrage, innovation, organization, and uncertainty-bearing. This permits us to model the nature of value creation from a common analytical platform, and to measure value capture as a set of distinct rent streams available to multiple stakeholders over time.

Keywords: Entrepreneurship, Formal Model, Value Creation, New Entry, Entrepreneurial Rents

Suggested Citation

Westgren, Randall Edward and Wuebker, Robert, An Economic Model of Strategic Entrepreneurship (January 10, 2019). Available at SSRN: https://ssrn.com/abstract=3581245 or http://dx.doi.org/10.2139/ssrn.3581245

Randall Edward Westgren

University of Missouri at Columbia - Department of Applied Social Sciences ( email )

Mumford Hall
Columbia, MO 65211
United States

Robert Wuebker (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 East Campus Circle Drive
Salt Lake City, UT 84112-9304
United States

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