A Competitive Model of (Super)Stars
The usual explanations for superstar effects---when a firm’s revenue is positive and convex in quality, and a few firms earn a large share of market revenue---are imperfect substitution between sellers, low marginal cost of output, and marginal cost declining as quality increases. Herein, a competitive model is developed in which superstar effects occur simply because a few firms have quality significantly higher than others. No firm needs to sell more than a small percentage of market output, and cost can increase in output and in quality (the latter possibly at no more than a decreasing rate).
|Date of creation:||2004|
|Date of revision:||2005|
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"Handbook of the Eonomics of Art and Culture,"
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2013/152412, ULB -- Universite Libre de Bruxelles.
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- Alan B. Krueger, 2005. "The Economics of Real Superstars: The Market for Rock Concerts in the Material World," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 1-30, January.
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