This study examines the relationship between a venture capitalist and an entrepreneur and follows it from its inception to the exit stage. The model we use is a multi-period game theoretic model with moral hazard where the contract is set in the first period. The contribution of the study lies in the insights it provides on optimal contracts and its characterization of an endogenous exit point....

Ludwig von Mises, Friedrich Hayek, and Murray Rothbard were the main architects of the distinctly Austrian theory of production as it exists today. All three conceived the entrepreneurial function in the actual market economy as presupposing the ownership of property, specifically capital. Yet, many, if not most, contemporary Austrian economists conceive the entrepreneur as a pure decisionmaker...

At the dawn of this century, the European Commission launched the Lisbon Strategy, which was revisited in 2010 with the Europe 2020 Strategy for a smart, sustainable and inclusive economy. In order to put the strategy into a more concrete form, the concept of the ‘Knowledge Triangle (KT)’ has been introduced. It links together Research, Education and Innovation and sheds some new light on the I...

We empirically examine the effect of self-efficacy on entrepreneurial investment choices. We identify various attributes of entrepreneurial investment and argue that higher self-efficacy is associated with more aggressive entrepreneurial investment decisions. We show that self-efficacy increases the likelihood of being a nascent entrepreneur and creating an operating business. Self-efficacy als...

Scholars have suggested that counterfactual thinking may play an important role in entrepreneurship; however, empirical research positioned to inform the nature of this relationship has been equivocal. In this study, we draw on the tenets of social cognition theory as a basis to investigate the relationship between counterfactual thinking and the dispositional attributes of the entrepreneur, hy...

Unpacking the concept of entrepreneurial-opportunity to include three categories of essential ingredients, provides a fruitful framework for applying Israel Kirzner’s approach to entrepreneurship—bridging the entrepreneur as someone alert to opportunities to create value, to real world situations requiring the entrepreneur’s evaluation of resource-inputs and prospective outputs, and his percept...

This paper makes explicit the role of the entrepreneur in a consumer-producer economy. Entrepreneurial behavior changes the status quo by altering existing comparative advantages. A positive feedback effect with trading institutions ensues. This model shows how the entrepreneur can, when successful, create economic growth but if unsuccessful, can contribute to an economic contraction. Using our...