Entrepreneurship in a Theory of Capital and Finance: Illustrating the use of Subjective Quantification

Managerial and Decision Economics (forthcoming)

28 Pages Posted:

See all articles by Peter Lewin

Peter Lewin

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

Nicolas Cachanosky

Metropolitan State University of Denver; American Institute for Economic Research

Date Written: January 6, 2020

Abstract

In order to identify and evaluate an entrepreneurial opportunity calculation is required. The entrepreneur must do more than simply perceive an opportunity to do something new to create value in the marketplace. Insofar as alternative possible actions exist, the entrepreneur must choose between them. And even as the chosen opportunity is pursued, he must choose between alternative modes of production and organization in the ongoing combination of resources. It has been pointed out that this requires monetary calculation. Little beyond this has been said in the entrepreneurial literature. The details of the kind of calculation required have been left mostly implicit. This article borrows from the finance literature to suggest a general and universal framework for such calculation and to offer one possible more specific method for using that framework for ongoing entrepreneurial judgment calls.

Keywords: entrepreneurship, subjective calculation, capital theory, finance

Suggested Citation

Lewin, Peter and Cachanosky, Nicolas, Entrepreneurship in a Theory of Capital and Finance: Illustrating the use of Subjective Quantification (January 6, 2020). Managerial and Decision Economics (forthcoming). Available at SSRN: https://ssrn.com/abstract=

Peter Lewin

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics ( email )

2601 North Floyd Road
P.O. Box 830688
Richardson, TX 75083
United States

Nicolas Cachanosky (Contact Author)

Metropolitan State University of Denver ( email )

Student Success Building
890 Auraria Pkwy #310
Denver, CO 80217
United States

HOME PAGE: http://www.ncachanosky.edu

American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

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