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Heterogeneous Capital, Entrepreneurship, and Economic Organization

Author

Listed:
  • Kirsten Foss
  • Nicolai J. Foss
  • Peter G. Klein
  • Sandra K. Klein

Abstract

We outline an Austrian approach to economic organization based on the entrepreneur and the Austrian idea of capital as heterogeneous and time-dimensioned, tow themes associated with Israel Kirzner's contributions. We provide a novel interpretation of capital heterogeneity based on the notion of attributes, argue that attributes are costly to measure and that this links directly to the theory of economic organization. In particular, we develop insights in economic organization based on the notion that entrepreneurs will often have to experiment with capital assets to gauge the value of these assets when deployed in production.

Suggested Citation

  • Kirsten Foss & Nicolai J. Foss & Peter G. Klein & Sandra K. Klein, 2002. "Heterogeneous Capital, Entrepreneurship, and Economic Organization," DRUID Working Papers 02-01, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:02-01
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    References listed on IDEAS

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    Cited by:

    1. Stefan W. Schmitz, 2004. "Uncertainty in the Austrian Theory of Capital," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 17(1), pages 67-85, March.
    2. Ryan W. Angus & Matthew A. Barlow, 2025. "Organizing transactions between entrepreneurs and human capital resources under Knightian uncertainty," Small Business Economics, Springer, vol. 64(3), pages 1035-1055, March.
    3. Saras D. Sarasvathy & Nicholas Dew, 2013. "Without judgment: An empirically-based entrepreneurial theory of the firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 277-296, September.
    4. Nicolai J. Foss & Peter G. Klein, 2004. "Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?," DRUID Working Papers 04-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    5. Richard N. Langlois, 2013. "The Austrian theory of the firm: Retrospect and prospect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 247-258, September.

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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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