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Causation And Effectuation: Toward A Theoretical Shift From Economic Inevitability To Entrepreneurial Contingency

S. Sarasvathy
Published 2001 · Economics

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In economics and management theories, scholars have traditionally assumed the existence of artifacts such as firms/organizations and markets. I argue that an explanation for the creation of such artifacts requires the notion of effectuation. Causation rests on a logic of prediction, effectuation on the logic of control. I illustrate effectuation through business examples and realistic thought experiments, examine its connections with existing theories and empirical evidence, and offer a list of testable propositions for future empirical work.
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