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 InfoPaper provided by Maastricht University in its series Open Access publications from Maastricht University with number urn:nbn:nl:ui:27-12776.
Date of creation: 1998
Date of revision:
Publication status: Published in Journal of institutional and theoretical economics (1998) v.154, p.546-571
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Other versions of this item:
- Lex Borghans & Loek Groot, 1998. "Superstardom and Monopolistic Power: Why Media Stars Earn More Than Their Marginal Contribution to Welfare," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(3), pages 546-, September.
- 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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- Egon Franck & Stephan Nüesch, 2007.
"Talent and/or Popularity - What Does it Take to Be a Superstar,"
0074, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Egon Franck & Stephan Nüesch, 2012. "Talent And/Or Popularity: What Does It Take To Be A Superstar?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 202-216, 01.
- Egon Franck & Stephan Nüesch, 2007. "Talent and/or Popularity - What Does it Take to Be a Superstar," Working Papers 0018, University of Zurich, Center for Research in Sports Administration (CRSA).
- David E. Giles, 2005.
"Superstardom in the U.S. Popular Music Industry Revisited,"
Econometrics Working Papers
0511, Department of Economics, University of Victoria.
- Giles, David E., 2006. "Superstardom in the US popular music industry revisited," Economics Letters, Elsevier, vol. 92(1), pages 68-74, July.
- Borgmans,Lex & Weel,Bas,ter, 2000.
"How computerization changes the UK labour market: The facts viewed from a new perspective,"
025, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- Borghans L. & Weel B. ter, 2000. "How computerizaton changes the UK Labour Market: The Facts viewed from a new Perspective," Working Papers 010, Maastricht : ROA,Research Centre for Education and the Labour Market.
- Timothy Perri, 2011.
"A Competitive Model of (Super)Stars,"
11-11, Department of Economics, Appalachian State University.
- 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.
- Timothy Perri, 2011. "Substitution and Superstars," Working Papers 11-14, Department of Economics, Appalachian State University.
- 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.
- Egon Franck & Stephan Nüesch, 2006. "Explaining the Star Shift in the Media– Why “Manufactured” Celebrities are More Lucrative than “Self-Made” Superstars," Working Papers 0057, University of Zurich, Institute for Strategy and Business Economics (ISU).
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