This paper has identified a substantial gap in our understanding of economics and has set out a model of the pre-firm to bridge that gap. The pre-firm is posited as the mechanism through which the economy discovers future demand and creates firms that fulfill that demand. The entrepreneur who undertakes and completes the pre-firm process creates the firm through a set of interconnected entrepreneurial decisions, the constraints and consequences of which are inherited by the firm. It has been shown that the pre-firm provides the initial conditions for the structure and future trajectory of the firm-and as such promises to enhance our understanding of firms and influence several aspects of our current theories about firms.
I thank the Ewing Marion Kauffman Foundation for their financial support for my empirical work. I thank my advisors Herb Simon and Lester Lave for their conversation, their probing, worrisome questions, and their unwavering enthusiasm for the project. I thank Anil Menon for helping me turn a jumble of enthusiastic ideas into a readable paper and along with Jack Roseman, for influencing my thinking in special ways.
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