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On the Theory of Entrepreneurial Incentives and Alertness

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  • Matthew McCaffrey

Abstract

This paper analyzes the theory of “entrepreneurial incentives†in the work of Israel Kirzner. It argues that there is a logical problem with the notion of profit opportunities as exogenous causal agents: Without additional assumptions, the existence of opportunities alone does not sufficiently explain the alertness of entrepreneurs. The paper considers both stronger and weaker versions of this problem. It also questions the relation between entrepreneurial incentives and the tendency toward entrepreneurial success. Finally, it provides some commentary on the relevance of entrepreneurial incentives for an overall theory of the entrepreneur, and identifies several potential solutions to the problems discussed.

Suggested Citation

  • Matthew McCaffrey, 2014. "On the Theory of Entrepreneurial Incentives and Alertness," Entrepreneurship Theory and Practice, , vol. 38(4), pages 891-911, July.
    • Handle: RePEc:sae:entthe:v:38:y:2014:i:4:p:891-911
    DOI: 10.1111/etap.12013
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    References listed on IDEAS

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    Cited by:

    1. Tang, Jintong & Levasseur, Ludvig & Karami, Masoud & Busenitz, Lowell, 2021. "Being alert to new opportunities: It is a matter of time," Journal of Business Venturing Insights, Elsevier, vol. 15(C).
    2. Yongbo Sun & Shuang Du & Yixin Ding, 2020. "The Relationship between Slack Resources, Resource Bricolage, and Entrepreneurial Opportunity Identification—Based on Resource Opportunity Perspective," Sustainability, MDPI, vol. 12(3), pages 1-25, February.
    3. Steffen Korsgaard & Henrik Berglund & Claus Thrane & Per Blenker, 2016. "A Tale of Two Kirzners: Time, Uncertainty, and the “Nature†of Opportunities," Entrepreneurship Theory and Practice, , vol. 40(4), pages 867-889, July.
    4. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, January.
    5. Srivastava, Smita & Sahaym, Arvin & Allison, Thomas H., 2021. "Alert and Awake: Role of alertness and attention on rate of new product introductions," Journal of Business Venturing, Elsevier, vol. 36(4).
    6. Ramoglou, Stratos, 2021. "Knowable opportunities in an unknowable future? On the epistemological paradoxes of entrepreneurship theory," Journal of Business Venturing, Elsevier, vol. 36(2).
    7. Ludvig Levasseur & Jintong Tang & Masoud Karami & Lowell Busenitz & K. Michele Kacmar, 2022. "Increasing alertness to new opportunities: the influence of positive affect and implications for innovation," Asia Pacific Journal of Management, Springer, vol. 39(1), pages 27-49, March.
    8. Bylund, Per L. & McCaffrey, Matthew, 2017. "A theory of entrepreneurship and institutional uncertainty," Journal of Business Venturing, Elsevier, vol. 32(5), pages 461-475.
    9. Lanivich, Stephen E. & Smith, Adam & Levasseur, Ludvig & Pidduck, Robert J. & Busenitz, Lowell & Tang, Jintong, 2022. "Advancing entrepreneurial alertness: Review, synthesis, and future research directions," Journal of Business Research, Elsevier, vol. 139(C), pages 1165-1176.

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