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CLAIRVOYANCE OR SOMETHING SINISTER: A MODEL OF MARKET INSIGHTS AND OPPORTUNITY RECOGNITION.
DAVID M TOWNSEND JASON A. HARKINS
Within the broad framework of the entrepreneurial opportunity recognition literature, the debate has continued as to whether opportunities are discovered or created. While under the paradigm of neoclassical economics, entrepreneurial opportunities are held to be the temporary result of disequilibrium in external markets, a behavioral perspective on entrepreneurship emphasis the influence of creative agency by individuals on external markets. By examining the theoretical nexus of schema theory and the Neoclassical Economics’ perspective regarding market disequilibrium, this paper describes the formation of market insights as the first discovery stage in the opportunity recognition process. In addition, market insights are distinguished from entrepreneurial opportunities and are shown to be the result of a entrepreneurial cognitive processing while entrepreneurial opportunity recognition is shown to be the result of a unique entrepreneurial decision process. Overall, the goal of this paper is bridge the theoretical gap between the behavioral and economic perspectives regarding entrepreneurial opportunities and to construct a viable framework for considering the process by which entrepreneurs translate external stimuli into specific plans for action.