The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Superstars, Economics of

  • Walter Y. Oi
Reference work entry


Gigantic incomes and rare talents attract attention and elicit a search for an explanation. Sherwin Rosen has provided us with an elegant neoclassical model whose market equilibrium is characterized by a superstar. Given a fixed cost of consumption, customers flock to talented sellers. If there are no costs of production, the most talented seller becomes a superstar. Discrete gaps in the talent distribution allow less talented sellers to survive but they must charge lower prices. A competitive market equilibrium thus exhibits a skewed distribution of earnings and outputs.


Marshall, A. Motion pictures, economics of Rosen, Sherwin Simon, H. Superstars, economics of Yule distribution 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Walter Y. Oi
    • 1
  1. 1.