It has been argued that understanding of entrepreneurship and firm behavior can be advanced by generalizing the static theory of the neoclassical firm so that it can deal with conditions in a dynamic economy. The paper rejects generalization and explains why such a shift causes the nature of the...

"The initial objective of the paper is to describe the way in which the term 'New Institutional Economics' (NIE) emerged in the literature and became the designation for a new field concerned with the study of various analytical techniques designed for the exploration of institutional phenomena....

It has been suggested that the theory of the firm can be modified and improved by shifting to a (non-maximizing) heuristic approach that is able to explain how relatively efficient outcomes can be brought about by the use of 'fast and frugal' decision rules. The paper argues, however, that...