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2023 | Book

Informational Entrepreneurship in a World with Limited Insight

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About this book

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.

Table of Contents

Frontmatter
Chapter 1. Successful Anomalies
Abstract
These common approaches to develop a new business were primarily developed inductively, by watching what entrepreneurs do. Unfortunately, markets work the same way by watching what entrepreneurs do and then by very quickly adjusting their pricing—in fact, so quickly that entrepreneurs are often only able to earn average rates of return.
James O. Fiet
Chapter 2. Positioning in Time and Space
Abstract
Schumpeter in The Journal of Economic History, 7: 149–159, 1947, Schumpeter in The Theory of Economic Development. Oxford University Press. 1961) looked forward to the routinization of the discovery process. However, the only way that it could be routinized would be if its key processes were structural and could be relied on to be slow-to-change. Otherwise, experimental or experiential controls would be nearly impossible to implement. In this chapter, we will see that two processes whose influence never wane are the effects of time and space, which have existed prior to our understanding the role of specific information and how it can be monopolized to leverage a competitive advantage. Unfortunately, we do not think of time and space coming with their own dimensions so that they can be measured and gauged with regard to their effects on entrepreneurs. The concept of routines could change how scholars guage entrepreneurial activity.
James O. Fiet
Chapter 3. Informational Entrepreneurship
Abstract
Scholars have identified four different roles played by aspiring entrepreneurs in the discovery of venture opportunities. Entrepreneurs may not know it yet but one way for them to prosper would be to discover their own opportunities by being successful in one of these roles. What each of these roles has in common is that the discovery process consists of the acquisition of specific, risk-reducing information. Uncertain returns from such investments may deter them from making discoveries.
James O. Fiet
Chapter 4. Estimating Wealth Potential
Abstract
This chapter takes a deeper look at the ethical questions involved in an overclaim; this is beyond fraud in certain ways, because of the widespread belief in the near-omniscience of brain imaging data. The ethical concerns arise when this type of deceit occurs; the furthering of the illusion of omniscience, a special exploitation due to a perceived expertise and power that is not actual, and all of the downstream harm that occurs (including the furtherance of the belief that such knowledge and control is possible.) The belief in the control is enough to substitute for the actual control and confronts us with ethical issues that are not fully illustrated by conventional ethical thought.
James O. Fiet
Chapter 5. A Formal Proof of Informational Entrepreneurship
Abstract
Constrained, systematic search seems to work because it is a less costly and risky way to discover wealth-generating ideas compared with alternative approaches, assuming we hold constant an entrepreneur’s timing and place.
James O. Fiet
Chapter 6. The Science of What Is Possible
Abstract
This chapter reports on the testing of informational entrepreneurship by three very different population samples—(1) MBA students, (2) the working poor, and (3) technically trained employees of a large corporation—which is really a test of what is possible, when attempting to identify entrepreneurial discoveries. Its appendix contains the protocols for the testing. It demonstrates how all of the subjects were trained to use specific information to find discoveries at a rate that was always more effective than the extant prescription to stay alert. Also, this chapter operationalizes training protocols for employing constrained, systematic search, which can be copied by aspirants who wish to become informational entrepreneurs.
James O. Fiet
Chapter 7. Preventing Bias in Testing
Abstract
In 2002, I published The Systematic Search for Entrepreneurial Discoveries, which even its critics acknowledged was a notable departure from received alertness theory. It was one of the first calls for more prescriptive research. It was also the first prescriptive endorsement for what would become known as Informational Entrepreneurship.
James O. Fiet
Chapter 8. Arbitrage Using Windows of Opportunity
Abstract
One of the reasons that many opportunities are never exploited or even discovered is that an actor may think that he or she must immediately comply with uncertain obligations. This view may not be true if an entrepreneur can see his opportunities as options rather than commitments. An option is a right but not an obligation to consummate an exchange.
James O. Fiet
Chapter 9. Forgiving Business Models
Abstract
Another way to launch a new venture without any money, in addition to arbitrage, is by using a forgiving business model. The problem with being an entrepreneur is that it poses a risk of loss, which presumably is tolerated better by those who already possess resources, but not always.
James O. Fiet
Chapter 10. Cooperative Arrangements
Abstract
This chapter will suggest that cooperative arrangements among aspiring entrepreneurs could be a powerful, paradoxically important, informational instrument. Typically we think of entrepreneurs as scraping by atomistically; whereas, it may be possible for them to collaborate with others to improve the prospects of the ideas that they chose to implement. I have suggested that consideration sets are an underutilized pathway for entrepreneurs to find opportunities to exploit.
James O. Fiet
Chapter 11. Wealth Accumulation
Abstract
The road forward is really not as financially bleak as some aspiring entrepreneurs imagine because they are actors in an interactive system of agents that we refer to as a market. These agents are both buyers and sellers of goods and services. The market assigns prices to goods and services by equilibrating supply and demand, which assumes information sharing.
James O. Fiet
Chapter 12. A Challenge for the Field
Abstract
My purpose has been to illustrate how to organize entrepreneurship theory in a way that it constitutes a new body of knowledge that can serve as a basis for how we teach the subject. Underlying its eventual recommendations about how to discover and produce new wealth is the theory that has been developing for more than 300 years, but mainly its origins go back as far as Adam Smith when he wrote the Wealth of Nations in 1776. Smith was a classical economist who appreciated the primacy of markets over what we think we can accomplish as individuals. The purpose of this last chapter is to suggest a challenge for the field with regard to what to do with these new formulations.
James O. Fiet
Backmatter
Metadata
Title
Informational Entrepreneurship in a World with Limited Insight
Author
James O. Fiet
Copyright Year
2023
Electronic ISBN
978-3-031-16532-0
Print ISBN
978-3-031-16531-3
DOI
https://doi.org/10.1007/978-3-031-16532-0

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