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Superstars in Team Sports: An Economic Model

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  • Harashima, Taiji

Abstract

In professional sports, superstars can earn extremely high incomes compared with those of other players. The existence of superstars in team sports is interesting because, unlike in individual sports, it is the teams that compete, not the individual players. This paper examines the mechanism of how an individual player can be a superstar even in the context of team sports. The key to the mechanism is that the probability of winning differs tremendously depending on whether or not a team has top-ranked players (i.e., those with relatively high abilities). This factor, combined with the effect of ranking preference, means that the salaries of players increase exponentially from the bottom- to the top-ranked player. As a result, a top-ranked player can be a superstar even in team sports.

Suggested Citation

  • Harashima, Taiji, 2018. "Superstars in Team Sports: An Economic Model," MPRA Paper 86360, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:86360
    as

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    File URL: https://mpra.ub.uni-muenchen.de/86360/1/MPRA_paper_86360.pdf
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    References listed on IDEAS

    as
    1. Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-212, March.
    2. 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 546-546, September.
    3. Victor Ginsburgh & David Throsby, 2006. "Handbook of the economics of art and culture," ULB Institutional Repository 2013/1673, ULB -- Universite Libre de Bruxelles.
    4. Taiji HARASHIMA, 2017. "The Mechanism behind Product Differentiation An Economic Model," Journal of Advanced Research in Management, ASERS Publishing, vol. 8(2), pages 95-111.
    5. repec:srs:journl:jarm:v:8:y:2017:i:2:p:95-111 is not listed on IDEAS
    6. Harashima, Taiji, 2016. "Ranking Value and Preference: A Model of Superstardom," MPRA Paper 74626, University Library of Munich, Germany.
    7. Adler, Moshe, 2006. "Stardom and Talent," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 25, pages 895-906, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Superstar; Team sport; Income inequality; Ranking Value; Ranking preference; Monopoly; Monopoly profit;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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