Superstardom and Monopolistic Power: Why Media Stars Earn More Than Their Marginal Contribution to Welfare
AbstractIn this paper we develop in two steps an argument which shows that superstar incomes exceed their marginal contribution to welfare. Firstly, we argue that superstar incomes can only exist if two conditions are met: There should indeed be differences in talent; but also superstars must be able to exploit monopolistic power due to their number-one position. Secondly, we introduce an elementary probabilistic model that shows that the existence of such monopolistic power explains the stylized facts concerning superstars, while the presumption that high incomes are completely generated by differences in talent, is rejected by this model.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 154 (1998)
Issue (Month): 3 (September)
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Other versions of this item:
- Borghans, Lex & Groot, Loek, 1998. "Superstardom and monopolistic power: why media stars earn more than their marginal contribution to welfare," Open Access publications from Maastricht University urn:nbn:nl:ui:27-12776, Maastricht University.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- Lutter, Mark, 2012. "Soziale Strukturen des Erfolgs: Winner-take-all-Prozesse in der Kreativwirtschaft," MPIfG Discussion Paper 12/7, Max Planck Institute for the Study of Societies.
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- Nela Filimon & Jordi López-Sintas & Carlos Padrós-Reig, 2011. "A test of Rosen’s and Adler’s theories of superstars," Journal of Cultural Economics, Springer, vol. 35(2), pages 137-161, May.
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