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Ranking Value and Preference: A Model of Superstardom

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  • Harashima, Taiji

Abstract

Superstars earn extremely high incomes as compared with those of ordinary people, but why? In this paper, I present a model of superstardom that explains the mechanism of extremely high incomes based on the concepts of ranking value and ranking preference. I propose that goods and services possess not only practical values but also ranking values because people derive utility through various types of rankings. This emotional response (i.e., ranking preference) gives monopolistic powers to the producers of some types of goods or services. For some goods and services (e.g., professional sports), the ranking preference is very strong and therefore so is the level of monopolistic power. This strong monopolistic power is the origin of the extremely high incomes of superstars.

Suggested Citation

  • Harashima, Taiji, 2016. "Ranking Value and Preference: A Model of Superstardom," MPRA Paper 74626, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74626
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    File URL: https://mpra.ub.uni-muenchen.de/74626/1/MPRA_paper_74626.pdf
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    References listed on IDEAS

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    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. 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.
    5. J. Solnick, Sara & Hemenway, David, 1998. "Is more always better?: A survey on positional concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 373-383, November.
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    Citations

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    Cited by:

    1. Harashima, Taiji, 2020. "Rethinking the Ability-to-Pay and Equal Sacrifice Principles of Taxation: An Alternative Rationale for a Progressive Income Tax," MPRA Paper 102937, University Library of Munich, Germany.
    2. Harashima, Taiji, 2019. "Preventing Widening Inequality: Economic Rents and Sustainable Heterogeneity," MPRA Paper 95727, University Library of Munich, Germany.
    3. Harashima, Taiji, 2020. "An Alternative Rationale for the Necessity of an Inheritance Tax," MPRA Paper 100015, University Library of Munich, Germany.
    4. Harashima, Taiji, 2018. "Superstars in Team Sports: An Economic Model," MPRA Paper 86360, University Library of Munich, Germany.
    5. Harashima, Taiji, 2023. "Economic Rents Extracted in the Process of Consumption," MPRA Paper 119012, University Library of Munich, Germany.
    6. Harashima, Taiji, 2023. "Numerical Simulations of How Economic Inequality Increases in Democratic Countries," MPRA Paper 118710, University Library of Munich, Germany.
    7. Harashima, Taiji, 2019. "Why Is Executive Compensation So High? A Model of Executive Compensation," MPRA Paper 91326, University Library of Munich, Germany.
    8. Harashima, Taiji, 2021. "Consequence of Heterogeneous Economic Rents under the MDC-based Procedure," MPRA Paper 105765, University Library of Munich, Germany.
    9. Harashima, Taiji, 2021. "Mechanisms that Make Economic Inequality Increase in Democratic Countries," MPRA Paper 108535, University Library of Munich, Germany.
    10. 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.
    11. Harashima, Taiji, 2023. "Numerical Simulation of Reaching a Steady State: Effects of Economic Rents on Development of Economic Inequality," MPRA Paper 117137, University Library of Munich, Germany.
    12. Harashima, Taiji, 2023. "Secular Increase in Economic Inequality Accompanying a Constant Output/Capital Ratio," MPRA Paper 117705, University Library of Munich, Germany.

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    More about this item

    Keywords

    Superstar; Income inequality: Ranking Value; Ranking preference; Monopoly;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • 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

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