An agent-based model of entrepreneurship Examining the role of alertness and transaction costs
Authored by Graham D Newell, Matthew J Holian
Date Published: 2017
DOI: 10.1108/jepp-01-2015-0003
Sponsors:
No sponsors listed
Platforms:
NetLogo
Model Documentation:
Other Narrative
Pseudocode
Mathematical description
Model Code URLs:
https://drive.google.com/open?id=0B09rOsD6B8myblhQSjdsUVZiM3M
Abstract
Purpose - The purpose of this paper is to develop an agent-based model
that highlights the role of entrepreneurship in the market process.
Design/methodology/approach - The authors explore the effect of
entrepreneurial alertness and transaction costs on two normative
standards: the speed of price equilibration and the level of product
diversity.
Findings - Both higher alertness and lower transaction costs lead to
faster equilibration, as expected. High alertness contributes to high
product diversity, also as expected. However, and counter-intuitively,
lower transaction costs actually leads to lower levels of product
diversity, as markets equilibrate before entrepreneurs can discover many
new products.
Originality/value - The analysis provides new insight into
entrepreneurship theory and policy.
Tags
Economic theory
knowledge
discovery
research methods
Entrepreneurial action
Market process