Toward a Theory of Entrepreneurial Rents: a Simulation of the Market Process

M Keyhani, M. Levesque, A. Madhok

Research output: Contribution to JournalArticleAcademicpeer-review


While strategy theory relies heavily on equilibrium theories of economic rents such as Ricardian and monopoly rents, we do not yet have a comprehensive theory of disequilibrium or entrepreneurial rents. We use cooperative game theory to structure computer simulations of the market process in which acts of creation and discovery disequilibrate and equilibrate the market over time. Using simulation experiments, entrepreneurial rents can be isolated from structural rents by keeping initial structural advantages constant. We impute entrepreneurial rents to underlying actions of creation and discovery under various combinations. Our results have relevant implications for entrepreneurship strategy, particularly for firm boundaries and resource allocation decisions.
Original languageEnglish
Pages (from-to)76-96
JournalStrategic Management Journal
Issue number1
Publication statusPublished - 2015

Bibliographical note

PT: J; NR: 96; TC: 0; J9: STRATEGIC MANAGE J; PG: 21; GA: AW7WX; UT: WOS:000346473300005


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