Abstract
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.
Keywords
- Marshall, A.
- Motion pictures, economics of
- Rosen, Sherwin
- Simon, H.
- Superstars, economics of
- Yule distribution
JEL Classifications
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsBibliography
Adler, M. 1985. Stardom and talent. American Economic Review 75: 208–212.
Beckmann, M. 1987. Rank. In The new palgrave: A dictionary of economics, vol. 4, ed. J. Eatwell, M. Milgate and P. Newman. Basingstoke: Macmillan.
Borghans, L., and L. Groot. 1998. Superstardom and monopolistic power: Why media stars earn their marginal contribution to welfare. Journal of Institutional and Theoretical Economics 154: 546–571.
Chung, K., and R. Cox. 1994. A stochastic model of superstardom: An application of the Yule distribution. Review of Economics and Statistics 76: 771–775.
Krueger, A. 2005. The economics of real superstars: the market for rock concerts in the material world. Journal of Labor Economics 23: 1–30.
Marshall, A. 1920. Principles of economics. 8th ed, 1952. New York: Macmillan.
McConnell, C., and S. Brue. 2005. Economics, principles, problems, and policies. 16th ed. New York: McGraw Hill.
Rosen, S. 1981. The economics of superstars. American Economic Review 71: 845–858.
Rosen, S. 1983. The economics of superstars: Reply. American Economic Review 73: 460–462.
Simon, H. 1955. On a class of skew distribution functions. Biometrika 42: 425–440.
The Baseball Archive. Online. Available at http://www.baseball1.com/bb-data/bbd-mas.html. Accessed 29 Dec 2005.
Yule, G. 1924. A mathematical theory of evolution, based on the conclusion of Dr. J.C. Willis, F.R.S. Philosophical Transactions of the Royal Society of London Series B 213, 21–87.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Oi, W.Y. (2018). Superstars, Economics of. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2772
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2772
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences