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Year 2017, , 168 - 176, 30.06.2017
https://doi.org/10.17261/Pressacademia.2017.506

Abstract

References

  • Aghion, P. and Howitt, P. (1992). “A Model of Growth Through Creative Destruction,” Econometrica, Vol. 60, pp. 323-351.
  • Assous, M. and Lampa, R. (2014). “Lange’s 1938 Model: ‘Dynamics and the Optimum Propensity to Consume,’” GREDEG Working Paper No. 2014-2.
  • Dennett, D. C. (1998). Brainchildren. Essays on Designing Minds. London, Penguin Books.
  • Ericsson, R. and Pakes, A. (1995). “Markov-Perfect Industry Dynamics: A Framework for Empirical Work,” Review of Economic Studies, Vol. 62, 53-82.
  • Hacıoğlu, V. (2015). “Bayesian Expectations and Strategic Complementarity: Implications for Macroeconomic Stability,” Procedia-Social and Behavioral Sciences, Elsevier, Vol. 195, pp. 580-591.
  • Keuzenkamp, H. A. (1991). A Precursor to Muth: Tinbergen’s 1932 Model of Rational Expectations,” The Economic Journal, Vol. 101, No. 408, pp. 1245-1253.
  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.
  • Kirzner, I. (1997) “Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach,” Journal of Economic Literature, 35, Vol. 1, pp. 60-85.
  • Lange, O. (1943). “A Note on Innovations,” The Review of Economics and Statistics, Vol. 25, No. 1, pp. 19-25.
  • Lazonick, W. (2013). “The Theory of Innovative Enterprise: Methodology, Ideology, and Institutions” in Jamee K. Moudud, Cyrus Bina, and Patrick L. Mason, eds., Alternative Theories of Competition: Challengesto the Orthodoxy, Routledge, pp. 127-159.
  • Lewin, P. (2000). “Firms, Resources and Production Functions: The Relevance of the New Growth Economics for the Theory of the Firm,” A paper Presented to the School of Management, University of Texas at Dalles.
  • Lucas, R. E. JR. (1988). “On the Mechanics of Economic Development,” Journal of Monetary Economics, Vol. 22, 3-42.
  • Muth, J. F. (1961). “Rational Expectations and the Theory of Price Movements,” Econometrica, Vol. 29, pp. 315-335.
  • Nelson, R. R. and Winter, S. (1982). An Evolutionary Theory of Economic Change. London: The Belknap Press of Harvard University.
  • _________. (2002). “Evolutionary Theorizing in Economics,” Journal of Economic Perspectives, Vol. 16, No. 2, pp. 23-46.
  • Oltra, V. and Yıldızoğlu, M. (1998). “Learning and Expectations in R&D Decisions,” BETA-THEME Working Paper. Université Louis Pasteur. France.
  • Romer, P. M. (1986). “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94, pp. 1002-1037. Schumpeter, J. A. (1934). The Theory of Economic Development, Oxford University Press.
  • _________. (1942). Capitalism, Socialism and Democracy, New York: Harper and Brothers.
  • _________. (1947). “The Creative Response in Economic History,” The Journal of Economic History, Vol. 7, No. 2, pp. 149-159.
  • _________. (1939). Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, New York: McGraw Hill.
  • Silverberg, G., and Verspagen, B. (1995). An Evolutionary Model of Long Term Cyclical Variations of Catching Up and Falling Behind, IIASA.
  • Silverberg, G. and Verspagen, B. (1995b) From the Artificial to the Endogenous: Modelling Evolutionary Adaptation and Economic Growth. IIASA Working Paper, 95-08, February.
  • Silverberg, G., and Verspagen, B. (1999). “Evolutionary Theorizing on Economic Growth,” in K. Dopfer (ed.), The Evolutionary Principles of Economics. Norwell: MA, Cambridge University Press.
  • Simon, H. A. (1982) Models of Bounded Rationality. Cambridge: MA: The MIT Press. Tinbergen, J. (1933). “The Notions of Horizon and Expectancy in Dynamic Economics,” Econometrica, Vol. 1, No. 3, pp. 247-264.
  • _________. (1932). “Ein Problem der Dynamik,” Zeitschriftfiur Nationaldkonomie, III. Bd., 2. H., pp. I69-84.
  • Winter, S. (1984). “Schumpeterian Competition in Alternative Technological Regimes,” Journal of Economic Behavior and Organization, Vol. 5, pp. 287-320.

INNOVATIVE ENTREPRENUERSHIP UNDER UNCERTAINTY

Year 2017, , 168 - 176, 30.06.2017
https://doi.org/10.17261/Pressacademia.2017.506

Abstract

Purpose- This paper
analyzes the economic activity of innovative entrepreneurship under
uncertainty. We examine the profit maximization model of innovative firm under
two kinds of uncertainties. The first kind of uncertainty pertains to market
conditions. Erratic behavior of future prices creates market uncertainty.



Methodology-
This uncertainty is at least partly resolved by rational expectations
hypothesis. But repercussions of market imperfections still loom large in the
background of theoretical framework. The second kind of uncertainty is caused
by technological changes and the patterns of innovations. We use the black-box
approach methodology to production function and then improve it with a learning
model. Findings- The pace and space
of innovation adoption is retarded and narrowed by technological uncertainties.
This problem is tackled by neoclassical innovation models to some extent. In
particular, endogenous growth models and the industrial dynamics model attempt
to endogenize the innovation and technology under rational expectations.


Conclusion- But these
models provide incomplete insights for they do not deal with learning behavior
of innovative entrepreneurs. We propose an alternative learning model which
takes into account the adaptive and imitative behavior of individual innovators
whose economic actions matter in the general framework of real life economics.

References

  • Aghion, P. and Howitt, P. (1992). “A Model of Growth Through Creative Destruction,” Econometrica, Vol. 60, pp. 323-351.
  • Assous, M. and Lampa, R. (2014). “Lange’s 1938 Model: ‘Dynamics and the Optimum Propensity to Consume,’” GREDEG Working Paper No. 2014-2.
  • Dennett, D. C. (1998). Brainchildren. Essays on Designing Minds. London, Penguin Books.
  • Ericsson, R. and Pakes, A. (1995). “Markov-Perfect Industry Dynamics: A Framework for Empirical Work,” Review of Economic Studies, Vol. 62, 53-82.
  • Hacıoğlu, V. (2015). “Bayesian Expectations and Strategic Complementarity: Implications for Macroeconomic Stability,” Procedia-Social and Behavioral Sciences, Elsevier, Vol. 195, pp. 580-591.
  • Keuzenkamp, H. A. (1991). A Precursor to Muth: Tinbergen’s 1932 Model of Rational Expectations,” The Economic Journal, Vol. 101, No. 408, pp. 1245-1253.
  • Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. London: Macmillan.
  • Kirzner, I. (1997) “Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach,” Journal of Economic Literature, 35, Vol. 1, pp. 60-85.
  • Lange, O. (1943). “A Note on Innovations,” The Review of Economics and Statistics, Vol. 25, No. 1, pp. 19-25.
  • Lazonick, W. (2013). “The Theory of Innovative Enterprise: Methodology, Ideology, and Institutions” in Jamee K. Moudud, Cyrus Bina, and Patrick L. Mason, eds., Alternative Theories of Competition: Challengesto the Orthodoxy, Routledge, pp. 127-159.
  • Lewin, P. (2000). “Firms, Resources and Production Functions: The Relevance of the New Growth Economics for the Theory of the Firm,” A paper Presented to the School of Management, University of Texas at Dalles.
  • Lucas, R. E. JR. (1988). “On the Mechanics of Economic Development,” Journal of Monetary Economics, Vol. 22, 3-42.
  • Muth, J. F. (1961). “Rational Expectations and the Theory of Price Movements,” Econometrica, Vol. 29, pp. 315-335.
  • Nelson, R. R. and Winter, S. (1982). An Evolutionary Theory of Economic Change. London: The Belknap Press of Harvard University.
  • _________. (2002). “Evolutionary Theorizing in Economics,” Journal of Economic Perspectives, Vol. 16, No. 2, pp. 23-46.
  • Oltra, V. and Yıldızoğlu, M. (1998). “Learning and Expectations in R&D Decisions,” BETA-THEME Working Paper. Université Louis Pasteur. France.
  • Romer, P. M. (1986). “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94, pp. 1002-1037. Schumpeter, J. A. (1934). The Theory of Economic Development, Oxford University Press.
  • _________. (1942). Capitalism, Socialism and Democracy, New York: Harper and Brothers.
  • _________. (1947). “The Creative Response in Economic History,” The Journal of Economic History, Vol. 7, No. 2, pp. 149-159.
  • _________. (1939). Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, New York: McGraw Hill.
  • Silverberg, G., and Verspagen, B. (1995). An Evolutionary Model of Long Term Cyclical Variations of Catching Up and Falling Behind, IIASA.
  • Silverberg, G. and Verspagen, B. (1995b) From the Artificial to the Endogenous: Modelling Evolutionary Adaptation and Economic Growth. IIASA Working Paper, 95-08, February.
  • Silverberg, G., and Verspagen, B. (1999). “Evolutionary Theorizing on Economic Growth,” in K. Dopfer (ed.), The Evolutionary Principles of Economics. Norwell: MA, Cambridge University Press.
  • Simon, H. A. (1982) Models of Bounded Rationality. Cambridge: MA: The MIT Press. Tinbergen, J. (1933). “The Notions of Horizon and Expectancy in Dynamic Economics,” Econometrica, Vol. 1, No. 3, pp. 247-264.
  • _________. (1932). “Ein Problem der Dynamik,” Zeitschriftfiur Nationaldkonomie, III. Bd., 2. H., pp. I69-84.
  • Winter, S. (1984). “Schumpeterian Competition in Alternative Technological Regimes,” Journal of Economic Behavior and Organization, Vol. 5, pp. 287-320.
There are 26 citations in total.

Details

Journal Section Articles
Authors

Sefer Sener

Volkan Hacioglu

Publication Date June 30, 2017
Published in Issue Year 2017

Cite

APA Sener, S., & Hacioglu, V. (2017). INNOVATIVE ENTREPRENUERSHIP UNDER UNCERTAINTY. Journal of Business Economics and Finance, 6(2), 168-176. https://doi.org/10.17261/Pressacademia.2017.506

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