Learning, Business Strategies and the Market Process: A Case Study of a Street Entrepreneur in Taipei

Abstract

Small businesses are important in developing economies. They create jobs and promote local and regional economies (Hall 2000). In the Asia-Pacific region, street vending businesses account for 72% of all private sector enterprises in 2000 (Hall 2002). Despite their contributions to job creation and economic growth, hitherto, studies on street entrepreneurship are very limited. Worse, entrepreneurship plays no role in mainstream neoclassical economics in which optimization technique and production functions are adopted. In the entrepreneurless world, business people are simply mechanic robots who move from disequilibrium to equilibrium through information searching (Baumol 1968). Learning in neoclassical paradigm is exogenously given and unexplained (Boland 1982, p. 157). Individuals make decision with known options (Wald 1950). In contrast, scholars of Austrian school argue that no actor has omniscient knowledge and knowledge is dispersed. With genuine uncertainty, entrepreneurs explore opportunities in the market (Kirzner 1982) and devise new strategies to solve new problems by trial and error.