Entrepreneurial Behaviour And Market Process

In modern economic theory, studies haven’t reached a broad consensus on uncertainty and entrepreneurs heterogeneity, this has resulted in chaos of theory of the firm in some way. Current studies about theory of the firm explain the existence and development of firm from the perspective of contract and entrepreneurship. Although these theories broaden our research thinking on theory of the firm, they don’t understand the essentially reasons of the existence of firm. By reviewing popular economic theory, we found that different theory of the firm due to the different way to comprehend the nature of market, market equilibrium view and market process view, which are the two main ideas that mainstream economists understand market. Further analysis, we found that economists hold different perspective to understand the market, because they have a different understanding of the market participants. Therefore, we recognize the uncertainty in the market and entrepreneur’s heterogeneity, and stick with the market view of the creative process to study the theory of the firm with market process view.By reviewing and researching the relevant literature, we introduce uncertainty to the analysis framework of entrepreneur to research the behavior choice of the entrepreneur in the market, and establish model to explain entrepreneurs, firm and other issues related markets. We use market selection parameters and ratio of entrepreneurs choice behavior reliability as a condition to choose behavior, to analyze bounded rationality of entrepreneur through the quality of the information and their ability to process information, we believe that the uncertainty of the market determines the innovation of entrepreneur’s behavior, entrepreneur’s heterogeneity determines the company’s monopoly, firm is a pricing mechanism for entrepreneurial competence, profit as the rent for entrepreneurial competence are owned by entrepreneurs, entrepreneurs are the driving force of the creative process of the market, and the development of the creative process is driven by three kinds of enterprise behavior patterns, such as innovation, imitation and arbitrage. Further, we believe that creativity of the market is accomplished through entrepreneurs’ innovative behavior, the process of the market is based on the monopoly of the enterprise, so development of the market is not for a purpose. We believe that Chinese economic reform should be Non-purpose, any top-level design based on a good purpose cannot be fully achieved with its original goal. The aim of Chinese economic reform should be stimulating the entrepreneurs’ innovation ability by reducing the parameters of market selection to promote creative process of the Chinese market.Concretely speaking, we introduce the research framework, logical structure and overall arrangement of this paper in the first chapter.In the second chapter, based on market equilibrium theory and market process theory, this paper analyzes the logic of the evolution of theory of the firm, and points out the shortcomings of current theories. In the third chapter, based on the introduction of uncertainty, this paper establishes an analytical framework for the entrepreneurs’behavior choice, and further extends the model to analyze the entrepreneurs’ bounded rationality and the predictability of their market behavior. The fourth chapter is a new interpretation of theory of the firm through applying the conclusions of previous analysis, this paper explains economic issues such as enterprise, profit, monopoly, enterprise Behavior patterns and market creative process. In the fifth chapter, this paper analyzes the main theoretical disputes of Chinese economic reform, and puts forward our views. The sixth chapter includes summary and outlook, we summarize the main points and problem of this paper, and propose the direction of further research.