Beggars and horseless: entrepreneurial origins of organizations and markets

Herbert Simon supervised my doctoral dissertation that spelled out the baseline of entrepreneurial expertise, now known under the rubric of effectuation. In this chapter, I share several insightful conversations with Simon while summarizing the content and history of over two decades of work on effectual logic. I show how effectuation offers an “even-if” alternative to Milton Friedman’s arguments about the sufficiency of predictive models that espouse an “as-if” logic. I also relate the effectual process to topics of interest in the economics of entrepreneurship, ranging from overconfidence bias, occupational choice, opportunity costs and opportunism.