Ronald Coase's landmark 1937 article, “The Nature of the Firm,” framed the study of organizational economics for decades. Coase asked three fundamental questions: Why do firms exist? What determines their boundaries? How should firms be organized internally? To answer the first question,...

Entrepreneurs in a competitive economy face three fundamental problems. They need to search for and discover a business opportunity ( Kirzner, 1973 ), evaluate it ( Knight, 1921 ), and then seize the opportunity to reap entrepreneurial profits ( Schumpeter, 1911 ) ( Langlois, 2007 ). The problem...