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Estimating the wealth-creating potential of a venture idea

In: The Entrepreneurial Solution to Poverty and the Science of What is Possible

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Abstract

The opportunities that aspiring entrepreneurs could discover are all not of equal value and several scholars have argued that their value cannot be known ex ante. Unless aspiring entrepreneurs can quantify their expected return from a venture, it is impossible for them to adjust it for risk. Yet entrepreneurs live in the present and must commit to discovering and exploiting a venture idea with incomplete information, which makes their choice more laden with risk. Otherwise, failing to choose, they would never accomplish anything. It is not by choice that they act with incomplete information. Rather, it is their only option if they want to play the game. In this research, I explore an approach for estimating the value of future wealth creation by examining venture ideas expressed as a business plan). Estimating the future value of an opportunity is essential for conducting controlled experiments to know whether informational economics has anything to offer to the poor.

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  • ., 2022. "Estimating the wealth-creating potential of a venture idea," Chapters, in: The Entrepreneurial Solution to Poverty and the Science of What is Possible, chapter 3, pages 36-58, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:21624_3
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