May 11, 2000

An Entrepreneurial Theory of the Firm

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Traditional theories of the firm have concentrated on such topics as technology, evolution and transaction costs whilst failing to account for one of the most fundamental aspects of the market process: entrepreneurial activity. Using an approach consistent with the modern Austrian School, Frederic Sautet has developed the open-ended theories initiated by Hayek and Mises to bring a fresh perspective to conventional economic theory. An Entrepreneurial Theory of the Firm makes a thorough and comprehensive enquiry into the nature of the relationship that exists between firms and markets, with separate, in-depth explorations of the issues of both the existence and inner organisation of the firm. Sautet develops a model that explains the emergence of the firm in the market process as the result of entrepreneurial activity in the context of genuine uncertainty. The Austrian angle enables him to provide a theory that is both alternative and complementary to established viewpoints. This original, provocative work offers a thorough and convincing theory that encompasses a wealth of existing literature and leads it in an entirely new direction.