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Abstract. Scholars have idenufied four different roles played process utilized by entrepreneurs to identify new
by entrepreneurs in the discovery of new venture opponuni- venture opportunities, even though it has been the
ties. What each of these roles has in common is that the
discovery process consists of the acquisition of specific, risk- subject of considerable study. Our lack of under-
reducing information. Uncertain returns from such investments standing of how entrepreneurs make discoveries
deter some would-be entrepreneurs from making discoveries. is unfortunate because it complicates the identifi-
This approach suggests that the vision to make entrepreneurial cation of a conceptual basis for investigating or
discoveries depends on making cost-effective informational
investments, not on special talents possessed by only a few
teaching entrepreneurship. It also adds to the
aspirants. difficulty of even being able to define what we
mean by the term, entrepreneurship. For example,
does entrepreneurship include corporate venturing,
When entrepreneurs discover an opportunity to expanding an existing business, replicating a
engage in a profitable venture that others have successful concept in a second career, or operating
overlooked, is it because they have a special knack a family business? While there are some elements
for doing such things? Do they succeed because of discovery in each of these activities, this
they are smarter, more diligent, or more alert? An analysis does not specifically treat any of them.
entrepreneurial discovery (or for brevity, simply Rather if focuses on the underlying process of
a discovery) is an unexpected, yet valuable identifying unexpected, yet valuable economic
economic opportunity, such as the founding of a opportunities.
new firm, the creation of a new product line, the Discovery is fundamentally important to entre-
development of an innovative technology, the preneurship. Without discovery, the actions of
satisfaction of an ephemeral market need through entrepreneurs could almost be reduced to man-
arbitrage, or the like. For the purposes of this agerial rules of thumb that could be easily imitated
analysis, a discovery is valuable if it is one that by competitors. In the long-run, imitation would
is monetarily rewarding. Presumably, other aspir- reduce profits to average levels that would be
ing entrepreneurs would judge the same discovery inadequate to justify risk-taking activity (Jacobson,
to be valuable but for some reason they do not 1992; Rumelt, 1987). Indeed, any venture oppor-
notice it. Do those who overlook such opportuni- tunity could work because it would have inherent
ties fail to see them because they lack visionary potential that could be tapped by a talented,
talent? If their failure stems from not having the manager-like, entrepreneur. However, some ven-
talent, it follows that only those who possess it tures fail because of competitive disadvantages
should attempt to be entrepreneurs, unless of unrelated to the talent or convictions of the entre-
course they feel very lucky. preneur.
We do not as yet understand the discovery Scholars generally study what entrepreneurs do
after discovering a venture opportunity. Taking
this approach, the risk of the venture is associated
Final version accepted on April 3, 1995 with the uncertain success of implementing a
business plan. However, risk also attends the
Department of Management.
Clem.<ion University,
choice of the type and means for acquiring infor-
SC 29634-1305, mation to make the initial discovery of the
U.SA. opportunity. Information can be purchased like any
Other commodity, but the acquisition expense can sufficient to maintain capital investment. It is an
become a sunk cost. Purchasing the wrong infor- elegant view that is mathematically powerful, but
mation also takes time, which adds to the cost of it provides no incentive for entrepreneurs to bear
making discoveries. This paper focuses on the ex the risk of creating new products and processes
ante process of discovery, rather than on the ex (Jacobson, 1992). This paper utilizes general equi-
post process of implementing the business plan. librium theory to demonstrate the need to provide
The central character in the discovery process incentives to entrepreneurs in exchange for
is the "entrepreneur." Scholars have generally bearing risk.
treated entrepreneurs as black boxes, acknowl-
edging that what they do is critically important.
However, there is no consensus on how to even The Austrian view
define what we mean by the term. One of the According to Austrian economics, markets are in
contributions of this paper is suggest a view of disequilibrium and profits are a disequilibrium
them that highlights their role in the discovery phenomenon (Jacobson, 1992). Disequilibrium
process. Accordingly, an entrepreneur is someone enables entrepreneurs to discover market imbal-
who optimizes the tradeoff between investing too ances that offer ways to earn above average
much or too little in specific, risk-reducing signals. returns. If they can protect their discoveries from
The remainder of this paper applies this new per- imitation by others, they can preserve a competi-
spective to the study of discovery as it develops tive advantage that will ensure their economic
an information-based model. Because the outcome survival (Barney, 1986a).
of the discovery process is the creation of value, The most often cited explanation of entrepre-
the next section of this paper examines the neurial discovery from Austrian economics is the
economics of discovery. carrying out of new combinations (Schumpeter,
1971). The individuals who carry out the combi-
The economics of discovery nations are entrepreneurs. However, the carrying
out of new combinations is only part of the story.
An exploration of the economics literature for While it is an indicator of the intentions of entre-
references to entrepreneurial discovery leads one preneurs (Bird, 1992), it does not provide us with
into the midst of an intradisciplinary conflict that any insight regarding how they discover a venture
generally pits Austrian economists, who assume opportunity.
entrepreneurs have an important role to play in
discovery, against Neoclassical economists, who
do not make allowances for such a role (Kirchhoff, Toward an information-based model of
1991). Since Adam Smith (1776), economists have entrepreneurial discovery
attempted to understand how entrepreneurs This study proposes as a starting point that we
discover economic opportunities and distribute consider a model of entrepreneurial discovery that
wealth. Toward the end of the nineteenth century. is grounded in the acquisition of information.
Neoclassical economists diminished the role of (Refer to Figure 1.) A central premise of this
economic actors in entrepreneurial discovery. model is that entrepreneurs are profit maximizers
Their chief spokesman was Marshall (1961) who who purchase information about prospective
advocated a genera] equilibrium theory. ventures that they can utilize to improve their risk-
adjusted return on investment. Some readers may
prefer to think of them as utility maximizers, or
The Neoclassical view
individuals who maximize their personal psychic
Essential to Neoclassical economics is the notion well-being, rather than their profit. The difficulty
that economic actors are rational and operate with conceptualizing them as utility maximizers,
independently in markets that are in equilibrium. however, is in selecting a metric to measure the
At equilibrium, prices are co-determined by dependent variable, entrepreneurial discovery. The
rational suppliers and rational buyers and utility maximization alternative also would intro-
everyone earns the same level ofprofits that is just duce a variety of unknown, and probably unknow-
Informational Basis of Entrepreneurial Discovery 421
Private Inlormation
hlark«l
Investments in Roles
Information
Signal
Opporluniir ChannBl
able, personal preferences as moderaling effects, opportunity, this paper uses it to illustrate how
which would shroud any relationships that could different ways of optimizing investments in
be found in unnecessary complexity. specific information lead to different entrepre-
The proposed model provides a basis for neurial roles in discovery.
building upon the perspectives of previous
researchers, particularly those from the Austrian Public or private markets
School (c/ Camerer, 1985). It also permits the
examination of actions by an entrepreneur that can Received theory assumes that markets are acces-
lead either to the discovery or rejection a prospec- sible by the general public and are both informa-
tive venture opportunity. Focusing only on those tionally and allocationally efficient. Markets are
deals that are carried out may cause scholars to informationally efficient when all buyers and
overlook a large number of venture possibilities sellers have the same information. Markets are
that were seriously considered by an entrepreneur, allocationalty efficient when prices are set so that
but that were eventually rejected. Finally, to they equate "the marginal rates of return (adjusted
demonstrate its relevance, the model must be for risk) for all [buyers and sellers}. In an
capable of generating propositions that identify allocationally efficient market, scarce savings are
possibilities for future research. optimally allocated to productive investments in
An unreasonable expectation for the model a way that benefits everyone" (Copeland and
would be to require that it generate propositions Weston, 1988. p. 330; cf. Fiet. 1993. pp. 4-6).
that have implications that are as rich as the When markets are informationally and allocation-
experiences of actual entrepreneurs. All theory ally efficient, a state of perfect competition exists
depicts a view that is a simplification of real expe- that requires that all economic actors earn the
rience. The model in Figure 1 constrains and same average levels of profit. Entrepreneurs are
simplifies the variables that may impact discovery, unwilling to bear the required above normal levels
which also limits the generalizability of any of risk in return for average levels of profit. Above
propositions that can be generated. Although normal risk is a level of risk that exceeds that
entrepreneurs would probably never utilize such which allows entrepreneurs to earn enough to keep
an approach to decide whether to pursue a venture their dedicated assets productively employed in
422 James O. Fiet
their ventures. Thus, given perfect competition, all acquire private information (Lorenzoni and Omati,
discovery would cease. There would no incentive 1988; cf. Granovetter, 1978). While using personal
for entrepreneurs to bear above normal levels of contacts is more time consuming than consulting
risk in return for average levels of profit. When public information sources, entrepreneurs have
we see entrepreneurs "betting the store", it is few alternatives because private markets are less
unlikely that it is because they expect to divide well organized than public markets, primarily as
their future earnings equally with their competi- a result of their lack of intermediaries, like stock
tors. This reasoning yields the first proposition. brokers, who can guarantee the value of informa-
tion exchange (Poindexter, 1976). Although the
Proposition I: Entrepreneurial discovery can rationale for the existence of these markets is
only occur where imperfect competition exists. compelling {cf Casson, 1990). we know compar-
atively little about them as a result of our recent
Entrepreneurs take on risk because they believe historical preoccupation with the Neoclassical
that they can manage it using private information, paradigm.
or information with very limited distribution, that Not only is private information distributed less
gives them a competitive advantage (Fiet and widely than public information, it is unavailable
Hellriegel, 1993). Their hubris contrasts with the to the general public. The latter is information that
findings of Fama's (1970) study of equity markets. is normally accessible through the print media. It
Fama (1970) reported that public equity is a public good, meaning that no one can take
markets are informationally efficient in a semi- custody of it and limit its distribution. Examples
strong sense. By this, he meant that no investor of this information are corporate annual reports,
could earn above normal returns by trading on investments advisory newsletters, or stock quote
publicly available information. If information data. It is information that is available to anyone
regarding ventures that could generate above who seeks it.
average returns were publicly available, potential In summary, entrepreneurial discovery can only
competitors would have an incentive to expro- occur when individuals have access to private
priate any returns that were in excess of average. information about the circumstances of a venture.
Subsequent investigations of the informational If the information about a venture were public,
efficiency of public equity markets have provided potential imitators would copy the discovery until
substantial empirical support for Fama's (1970) they depleted any capacity to earn above average
findings (cf Copeland and Weston, 1988). These returns. Because this private information is nol
subsequent investigations, however, were not available through published sources, entrepre-
intended to uncover how entrepreneurs use private neurial discovery can only occur in private infor-
information known only to themselves. mation markets. Refer to private information
Private information markets are those that markets in Figure 1. The above arguments
disseminate information that is not available to generate the following proposition.
the general public. This kind of information is
important to entrepreneurs because a discovery Proposition 2: Entrepreneurial discovery can
cannot generate sustainable above normal returns only occur in private markets for information.
unless its circumstances are private (cf. Barney,
1986a, 1986b). If its circumstances were not
private, rational, profit-maximizing competitors The role of signaling
would have already entered the market until When entrepreneurs position themselves so that
everyone was earning normal returns. Although they have access to information about potential
it is probably true that earning above normal new venture opportunities, they are using an infor-
returns is a temporary phenomenon for most mation channel.' An information channel is a
entrepreneurs, given our assumption of rationality, frequent source of signals. A signal is current
they would only be available in private informa- information that changes our ideas about a future
tion markets. state. Specifically, a signal can inform us about
Many entrepreneurs utilize personal contacts to how a discovery will affect an entrepreneur's
Informational Basis of Entrepreneurial Discovery 423
future profit. One of the most useful types of The role of risk evaluation in entrepreneurial
signals is one that reduces an entrepreneur's risk, discovery
thereby increasing his or her profit. Signals
become more valuable when they are unique or Entrepreneurs chose the types of signals in which
at least rare. When they are unique or rare they they most prefer to invest. Acquiring the wrong
may be combined with previously acquired signals poses a risk because their cost cannot be
specific information to provide an aspiring entre- recovered if it does not provide more accurate
preneur with a competitive advantage in moving information about the prospects for the discovery.
forward with the discovery. Whereas the acquisition of a signal can be expen-
Entrepreneurs are often pictured as achieving sive and must be purchased in the present, its true
mastery over their fate by being independent, value cannot be determined until the outcome of
rugged, dynamic, innovational, and making their the discovery is known in the future. The inter-
way, largely by their own efforts. Closer inspec- temporal nature of investing in signals poses a risk
tion of their enterprises leads us to a somewhat for aspiring entrepreneurs.
different conclusion. They thrive not by bucking Risk assumes the probability distribution of
the odds, but by selecting an environment that they future events is known. Recently, it has come to be
view as having an appropriate set of security increasingly a concept referring not to the prob-
arrangements, which probably includes being in ability o/outcomes but to their costs (Fischoff,
close proximity lo an information channel. Watson and Hope. 1984; March and Shapira,
Security arrangements are circumstances that limit 1987). The main focus has been on "defining
the risk of entrepreneurial discovery. Easterbrook tradeoffs between specific 'risk' and other costs"
(1949) suggests that the presence of these security (March and Shapira, 1987, pp. 1411, 1412). This
arrangements may be an historical accident as means that entrepreneurs might be willing to select
much as anything. Nevertheless, entrepreneurs an alternative with a very high probability of a loss
who survive are more than lucky. They are alert as long as the loss was small. However, they
to the types of signals that have previously been would prefer to avoid any choice where the loss
informative and they remain vigilant to any need could be devastating, even if its probability were
for a course correction. Figure 1 illustrates how low.
risk evaluation in the discovery process is depen- Projects that have an unknown future are
dent upon receiving signals, often from informa- uncertain. Uncertainty assumes the probability
tion channels. The arguments of this section give distribution of future events is unknown (Knight,
rise to the following proposition: 1933). Arrow ( 1989) argues.
There is a stale of the world which, if we only knew it,
Proposition 3: Entrepreneurs secure their would tell us what the consequences of every action are.
ventures from the risks associated with dis- But since we don't know it we can speak of uncertainty
covery by tapping into an information channel as being an uncertainty about the state of the world.
Whereas what will actually happen will depend on the
from which they obtain risk-reducing signals. action we lake but also depend on factors which we don't
know (p. 41).
Positioning would-be entrepreneurs in close
proximity to an information channel reduces their Entrepreneurs would be interested in a prospec-
access cost. Nevertheless, acquiring signals to tive venture if their evaluation of it suggested that
reduce risk is still not costless. Nor are there any it would be profitable. However, they could be
guarantees that their purchase will have the expected to reject it if they could not assess its
expected risk-reducing value. Thus, aspiring entre- risk.
preneurs may view the acquisition of risk-reducing Some researchers have suggested that entre-
signals as an investment of sorts. preneurs may be moderate risk takers (Brockhaus,
1980; Mancuso. 1975; McClelland, 1961),
however their studies used recent small business
founders as proxies for entrepreneurs, regardless
of whether or not they (I ) had innovated to enter
424 James O. Fiei
an existing market, or (2) had grown by creating not possible to invest in background investigations
new demand, or (3) had taken customers away of, or spend personal time with, providers of
from existing competitors (c/ Carland, Hoy, critical resources to assess their character and
Boulton and Carland, 1984, p. 357). If they would intentions and to use this same information to
have required these more risk-laden criteria from assess unforeseen competitive conditions. To
their subjects, it is very possible that they would assess competitive conditions, it would be neces-
have found that characterizing them as moderate sary to invest in different specific information,
risk takers is an over simplification. As noted such as conducting market research concerning
earlier, there is evidence to suggest that they customer or competitor reactions, and evaluating
believe that the normally expected probabilities of competitor cost structures.
failure do not apply to them. Hayek (1945) observed that the most valuable
Characterizing their risk-taking propensity as information to entrepreneurs is that which relates
moderate presupposes that entrepreneurs consider to the special circumstances of the time and place
risk to be an exogenous factor over which they of a particular deal. By a deal, he meant a decision
have no control. Their confidence in their ability with monetary consequences related to a prospec-
to manage risk may come from a belief that they tive new venture. The model in Figure 1 suggests
can reduce it by comparing relevant risk-reducing that it is the type of information entrepreneurs
signals with what they believe are the discovery's utilize for discovery. Because a risk-reducing
prospects. (Even the most aggressive entrepre- signal is specific information, and in this sense is
neurs do not attempt some discoveries because not a public good, one entrepreneur can acquire
their prospects are uncertain.) control of it and keep it secret. Because specific
One way to reduce the cost of risk evaluation information is ephemeral, it may only be valuable
is to specialize in the acquisition of information to the entrepreneur who discovers it. Others may
about particular types of risk, as suggested by Fiet not be as well positioned to take advantage of it
(1991b). Specialization allows entrepreneurs to with regard to the time, location, or special cir-
leverage their previous investments in specific cumstances of the deal. Thus, specific information,
information. They might focus their activities on as long as it can be kept private, can be a source
a particular industry or they might choose to limit of temporary competitive advantage. The crucial
their dealings to a selected group of suppliers and role of specific information in the discovery
distributors with whom they have had personal process is delineated in the next proposition.
experience. Proposition 4 suggests how entrepre-
neurs evaluate the factors affecting a prospective Proposition 5: The most valuable type of infor-
discovery's market risk and agency risk to deter- mation to entrepreneurs in making a discovery
mine the returns that can be expected from it. is specific information about the circumstances
Figure 1 illustrates the role of risk evaluation in of a prospective deal.
the discovery process.
Some entrepreneurs are better suited by their
Proposition 4: Entrepreneurs improve their previous experience to recognize the criticality of
chances of generating rewards from their dis- a signal. Previous experience consisting of specific
coveries by specializing in the acquisition of information is not the same as having a reservoir
information about particular types of risk. of general information, such as a diploma from a
graduate school. Presumably, many aspiring entre-
preneurs are similarly qualified. These arguments
Investments in specific information
lead to the next two propositions.
Figure 1 indicates that risk-reducing signals
consist of specific information. Specific informa- Proposition 6: Entrepreneurs reduce their risk
tion has little or no value for assessing the risk of discovery through the assessment of specific,
associated with more than one prospective dis- risk-reducing signals.
covery (Casson, 1990, Fiet, 1991b; Klein,
Crawford and Alchian, 1978). For example, it is Proposition 7: Some entrepreneurs are better
Informational Basis of Entrepreneurial Discovery 425
trageur (Kirzner, 1973, 1979a, 1979b). A risk able to react to similarities between current signals
arbitrageur is an entrepreneur who avoids risk by and specific information garnered from previous
contracting for factors at one price and simulta- experience.
neously selling to another party at a higher price. Continued investments in information can
Table II summarizes the investment role played increasingly become sunk costs. However, making
by each of these entrepreneurial types, the chief investments In information may also result in
proponent of the role, and significance of specific reducing risk through the amalgamation of signals
information to the role. The next section interprets that narrow the expected range of probabilities of
these roles as different approaches to investing in future events. Predicting the future more accu-
specific, risk-reducing signals. rately can become a competitive advantage when
it is utilized to deploy more efficiently specific
TABLE II production factors.
Entrepreneurs as investors in specific informalion Both the expected returns and risks from
investing in specific information are dependent
Investmem Chief Significance of
role of proponent specific information
upon the quantity and specificity of the informa-
entrepreneur of role to the role tion that is acquired. There is an optimal combi-
nation of the level of investment in information
Risk bearer Cantillon Uses it to reduce risk with the degree of information specificity. That is,
while uncertainty is investing in information that is too specific would
irreducible. be excessively costly or, alternatively, it would not
Innovator Schumpeter Uses it to creatively be sufficiently specific to be relevant to future
combine factors of discoveries. At the same time, investing in less
production.
specific information would generate a sub-optimal
Risk bearer and Baudeau Its uses are similar reduction in risk, while investing in more specific
innovator whether for competitive information would be excessively costly.
circumstances or for
innovation. According to Cantillon (1755), at least one of
Risk arbitrageur Kirzner
the functions of entrepreneurs in the discovery
Uses it to identify
opportunities for risk process is to be a risk bearer. However, he did not
arbitrage. differentiate between risk and uncertainty (Refer
to Table II). When the probabilities of future
events are known, the cost of an insurance contract
Entrepreneurs as investors in speciHc signals can be included in the deal as a cost of business.
To narrow the range of CantiUon's probability of
A major implication of the model in Figure 1 is future events, entrepreneurs invest in specific,
that entrepreneurs can be viewed as investors in risk-reducing information. When this probability
specific information. The view of entrepreneurs cannot be calculated, it is more accurate to say
introduced at the beginning of this paper can now that they bear uncertainty by avoiding it. Thus,
be seen in the context of an in form at ion-based investments in specific information enable an
model of entrepreneurial discovery. That is, an entrepreneur to differentiate between profitable
entrepreneur is a person who optimizes the opportunities with known risk factors from those
tradeoff between investing too much or too little whose probabilities are unknown, and thus unman-
in specific, risk-reducing signals. Specific signals ageable. However, even if a venture has a known
can reduce risk, however they are costly. risk with a positive net present value, it may still
Otherwise, we would expect to find entrepreneurs be rejected because the potential loss could be
acquiring unlimited amounts of them. Because devastating {cf. March and Shapira, 1987).
they are not costless, entrepreneurs evaluate and One way to reduce the risk of discovery is to
take responsibility for their cost. This approach follow Schumpeter's (1961) dictum to be an inno-
suggests that when entrepreneurs discover new vator. His innovator may be no more than an infor-
venture opportunities, it is not because they have mation specialist who has made inferences from
unusual perceptive ability. It is because they are previous experience about how to creatively
Informational Basis of Entrepreneurial Discovery 427
combine factors of production. (Refer to Table II) profits. Specific, risk-reducing information is not
The innovator's information comes through likely to be generalizable from prior experience.
devising alternative hypotheses, constructing a It must be gathered sequentially, often through one
crucial experiment, carrying it out so as to obtain information channel, one detail at a time.
a clean result, and recycling the whole mental Recognizing the sequential nature of information
process (Platt, 1964). Initially, specialized knowl- acquisition should allay the fears of those such as
edge can be acquired either by obtaining a pro- Schumpeter (1942) who foresaw the day when
fessional education or occupational experience. large firms would be the only ones who could
The more specialized the information, the more afford to be entrepreneurial.
useful it may be in viewing new possibilities for Kirzner's (1973) arbitrageurs could be misin-
combining factors of production. What seems to terpreted as possessing unusual perceptive ability,
be important for innovation is to systematically or as Kirzner, himself, describes them, as entre-
gather and interpret information. preneurs who were alert. Unfortunately, the
However, entrepreneurial discovery is often not admonition to stay alert has little pedagogical
intentionally directed innovation. Some of it value because it provides no guidelines about what
occurs as a result of exogenous factors, such, as should attract the attention of our alertness. In
weather (i.e., the anecdotal account of Newton's contrast, the approach that is suggested here
discovery of gravity when the apple fell off the focuses the attention of entrepreneurs, not upon
tree striking him on the head), governmental some general conceptual horizon, but upon issues
action (i.e., changes in the tax code, environmental related to what they already have experienced in
regulations, or industrial policy), or competitive investing in specific information. For each entre-
initiatives (i.e., actions to link data bases to an preneur these issues are unique and provide a
information highway, or the creation of a system potential competitive advantage.
of airline hubs that leaves openings for competi-
tors that provide direct connection between
smaller cities) that are outside the control of the Research implications
entrepreneur. When discovery occurs as a result of In order to derive and test hypotheses from these
exogenous factors acting upon the entrepreneur, nine propositions, two natural limitations of infor-
instead of the converse, we may argue that the mation must be addressed. These were identified
entrepreneur is not innovative, but lucky. In the by Arrow (1989) who noted that (1) it does not
case of lucky discoveries, entrepreneurs succeed, have obvious units and (2) it may not be cumula-
as Kirzner (1973, 1979a, 1979b) noted, by being, tive. That is, doubling the amount of it does not
alert to opportunities and quickly acting upon necessarily double its signaling capacity. Because
them. the present analysis postulates that entrepreneurs
Baudeau's (1767) risk bearers and innovators utilize investments in specific information to iden-
invest in information to reduce risk and uncer- tify new venture opportunities, hypotheses derived
tainty. They also invest in technical information from these propositions cannot be tested unless
related to how they can reduce costs or increase these limitations can be controlled in the analysis.
profits. Nevertheless, the processes are very Unfortunately, information does not come to us
similar. Although avoiding uncertainty and in neatly packaged units that can be added
managing risk may involve acquiring information together. One way to begin to address Arrow's
about the circumstances of the time and place of limitations is to consider information along
the deal, investing in technical information is the narrowly defined dimensions, such as market risk
same process in a different area. (Refer to Table and agency risk, as suggested by Fiet (1991a).
II.) In both circumstances, specific information is Market risk is due to unforeseen competitive con-
acquired and interpreted one detail at a time. ditions, whereas agency risk refers to the entre-
From an informational perspective, an entre- preneur's risk that those upon whom he depends
preneur's size or wealth does not necessarily trans- for resources may pursue their own interests. In
late into an advantage for Baudeau's entrepreneurs order to cumulate information about risk dimen-
as they attempt to reduce costs and increase sions, we must determine how to measure them.
428 James O. Fiet
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