Toward a Technology of Foolishness: Alternative Logics Embodied in Entrepreneurial Action

Posted: 22 Feb 2007

See all articles by Saras D. Sarasvathy

Saras D. Sarasvathy

University of Virginia - Darden School of Business

Nicholas Dew

Naval Postgraduate School

Date Written: 2005

Abstract

Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures (Sarasvathy, 1998) and the other the birth of a new industry (Dew, 2003) to identify three logics that constitute working elements of a technology of foolishness: (1) the logic of identity, as opposed to the logic of preferences; (2) the logic of action, as opposed to the logic of belief; and, (3) the logic of commitment, as opposed to the logic of transaction.

Keywords: Entrepreneurship, effectuation, goal ambiguity, decision-making, preference formation, identity, Bayesian inference, stakeholder commitments, new markets

Suggested Citation

Sarasvathy, Saras D. and Dew, Nicholas, Toward a Technology of Foolishness: Alternative Logics Embodied in Entrepreneurial Action (2005). Available at SSRN: https://ssrn.com/abstract=964495

Saras D. Sarasvathy (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.effectuation.org

Nicholas Dew

Naval Postgraduate School ( email )

1522 Cunningham Road
Monterey, CA 93943-5201
United States

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