Do we understand each other? Toward a simulated empathy theory for entrepreneurship

Entrepreneurs often face the daunting task of predicting consumer demand before it exists—what consumers will want if and when the entrepreneur might make it available to them. Such alertness and judgment require an entrepreneur's vicarious imagination—the supposition of what a value experience would be like for another—such as empathy. Prevailing theories of empathy, however, are ill-suited for entrepreneurship theory as they are defined as and focused on an emotion-matching process. We propose that empathy be understood instead as a vicarious mental simulation of another's experience that, when accurate, produces similar emotions but also similar experiential knowledge. According to our ‘simulated empathy theory,’ empathy is a rational imagination process, intentional and knowledge-based. We connect this empathy process to contemporary entrepreneurship theory, namely opportunity recognition and evaluation processes. We also revise the concept of empathic accuracy accordingly, and derive therefrom some practical implications regarding how entrepreneurs can increase their empathic accuracy and, thereby, their chances of success.     

The Little Dragons have Different Tales

Colin I. Bradford and William H. Branson (eds). Trade and Structural Change in Pacific Asia Jimmy M. Wheeler and Perry L. Wood, Beyond Recrimination: Perspectives on US-Taiwan Trade Tensions Bruce Dickson and Harry Harding (eds), Economic Relations in the Asian-Pacific Region     

Ordinaries

Journal of Bioeconomics - The Ordinaries column began in 2019 to promote a Neo-Darwinian synthesis of neoclassical and behavioral economics. This article places already-published, as well as...     

Central city crime and suburban economic growth

This paper explores the relationship between inner-city crime patterns and suburban income growth, analysing data on 318 US counties for selected metropolitan statistical areas of 32 states within the United States from 1982 to 1997. The findings suggest that violent crime does seem to have a negative impact on close-in suburbs, with a less negative impact farther away from the central city (becoming positive at some point). While results are not as robust as we had hoped they are consistent with flight to further-out suburbs rather than migration to different metropolitan areas in response to urban crime.     

Consumer switching costs: A typology,antecedents, and consequences

The management of customer switching costs has been hampered by the lack of a comprehensive typology for conceptualizing, categorizing, and measuring consumers' perceptions of these costs. This research develops a switching cost typology that identifies three types of switching costs: (1) procedural switching costs, primarily involving the loss of time and effort; (2) financial switching costs, involving the loss of financially quantifiable resources; and (3) relational switching costs, involving psychological or emotional discomfort due to the loss of identity and the breaking of bonds. The research then examines the antecedents and consequences of switching costs. The results suggest that consumers' perceptions of product complexity and provider heterogeneity, their breadth of product use, and their alternative provider and switching experience drive the switching costs they perceive. Furthermore, all three switching cost types significantly influence consumers' intentions to stay with their current service provider, explaining more variance than does satisfaction. In view of the potential importance of switching costs, the impact of all strategic moves on switching costs should be considered Michael Porter (1980:122). Thomas A. Burnham (Tburnham@scu.edu) (Ph.D., University of Texas) is an assistant professor of marketing in the Leavey School of Business at Santa Clara University. His research investigates the strategic management of consumer switching costs and the use of customer suggestions in product improvement. Prior to obtaining his doctorate, he developed strategic reports and budgets for MCI Telecommunications and consulted with the management of a cooperative in Paraguay as a U.S. Peace Corps volunteer. Judy K. Frels (Jfrels@rhsmith.umd.edu) (Ph.D., University of Texas) is an assistant professor of marketing in the Robert H. Smith School of Business at the University of Maryland. Her research focuses on the marketing of high-technology products, innovation adoption, and consumer switching costs. Prior to obtaining her Ph.D., she spent 10 years developing operating systems and compilers, as well as managing and marketing software and hardware products at IBM and at Tymlabs Corporation. She has consulted with firms including SAIC, Imation, Input-Output, Inc., and the University of Arkansas for Medical Sciences. Vijay Mahajan (Vmahajan@mail.utexas.edu) is John P. Harbin Centennial Chair in Business, McCombs School of Business, University of Texas at Austin. He is currently serving as dean of the Indian school of Management, Hyderabad, India. He has published extensively on innovation diffusion, new product development, and strategic marketing.     

Economics and evolutionary mismatch: humans in novel settings do not maximize

Standard economic theory does not consider the deep evolutionary history of humans. As such, economics ignores the notion that human nature can be ‘out of sync’ with certain aspects of modern life. In contrast, the theory of ‘evolutionary mismatch’ argues that novel products and situations might present particular difficulties. The assumptions of economics are discussed and examined from an evolutionary perspective including both equilibrium and mismatch. The conclusion is that economics would be changed by evolutionary thinking in general, and evolutionary mismatch in particular.     

Altruism and Spite in a Selfish Gene Model of Endogenous Preferences

Economists and biologists have long grappled with the apparent contradiction of altruism in a naturally-selected world. Standard economic models are built upon an assumption of material self-interest where agents maximize individual outcomes without regard for the effects on others. This paper begins with a brief discussion of the evidence that human behavior deviates from the economic assumption. With the goal of more accurately describing human nature, the interpersonal components of preferences are derived in a genetic model. This model predicts a variety of behaviors that are considered paradoxical within the standard economic framework. The optimal attitude towards others is parameterized by the genetic relationship between individuals and by the population size. For interactions between ‘average’ individuals, the standard economic assumption is the limiting case of the genetic model as the population becomes arbitrarily large. This revised version was published online in August 2006 with corrections to the Cover Date.