This summary focusses on the learning objectives that were introduced at the beginning of each lecture (week). Information from both the lectures and the articles was used to answer them.
This summary focusses on the learning objectives that were introduced at the beginning of each
lecture (week). These can be found in italics, behind an arrow. Mostly there are three per week.
Information from both the lectures and the articles was used to answer these learning points. Here
and there I added information that seemed relevant but could not directly be tied to one of the
learning objectives. Hope it proves useful to you, good luck!
Week 1
By engaging in arbitrage and bearing risk, the entrepreneurial class has an equilibrating function
within the economic system.
→ explain the different processes of opportunity recognition, opportunity evaluation, and
opportunity exploitation.
Recognition: either discovery or creation (see table below)
Evaluation
• careful investigation of market needs (problem/need)
o different solution; new value (better/cheaper/faster…)
• size and duration depend on nature of the opportunity.
o > when expected demand is large.
o > when profit margins are high.
o > when technology life cycle is young.
o > when density of competition is not too high (or low).
o > when cost of capital is low.
, Exploitation
• opportunity evaluation may or may not result in new venture.
• exploitation (development) process is cyclical and iterative.
→ explain why, and how some people, and not others, discover and exploit entrepreneurial
opportunities.
Three categories of opportunities:
1. Creation of new information, as occurs with the invention of new technologies.
2. Exploitation of market inefficiencies that result from information asymmetry, as occurs
across time and geography.
3. Reaction to shifts in the relative costs and benefits of alternative uses for resources, as
occurs with political, regulatory, or demo- graphic changes.
Two main factors that influence the probability that people will discover particular opportunities.
1. Possession of the prior information necessary to identify an opportunity.
2. The cognitive properties necessary to value it.
→ explain the differences between opportunity discovery and opportunity creation, and its
implications for entrepreneurial action.
In discovery theory the decision making is Risky because of the assumption that opportunities are
objective in nature. Due to this objectivity, it is possible for entrepreneurs to collect data about the
possible outcomes. The way this data analysis is carried out differs making the results less reliable.
In creation theory there is uncertainty due to information required to decide not existing. This is
because these opportunities are created, with no information available yet.
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