Uncertainty, Profit And Entrepreneurial Action: Frank Knight’S Contribution Reconsidered
Frank H. Knight held two different concepts of “uncertainty” in Risk, Uncertainty and Profit (1921). The first is based on the possibility of insuring against an outcome. This interpretation can be found in the existing literature on Knight’s work. The second refers to all instances where individuals have subjective expectations about the future. This second meaning forms the basis of Knight’s (1921) theory of profit and entrepreneurial action (Knight I). Knight I is limited; it provides no explanation of the incentive for entrepreneurial action. Knight’s neglected later theory of profit (1942) (Knight II) highlights the deficiencies of Knight I by offering a clear incentive for entrepreneurial action. The differences between the two theories of profit reflect the impact of incorporating historical time into economic analysis.
Volume (Year): 32 (2010)
Issue (Month): 02 (June)
|Contact details of provider:|| Postal: |
Web page: http://journals.cambridge.org/jid_HET
When requesting a correction, please mention this item's handle: RePEc:cup:jhisec:v:32:y:2010:i:02:p:221-235_00. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters)
If references are entirely missing, you can add them using this form.