Citation
The economics of superstars
TL;DR
Small talent differences yield large earnings differences
Foundational economic model explaining extreme compensation concentration among top performers. Shows that small differences in talent translate to large differences in earnings when technology enables serving large markets and when consumers prefer best available option.
Explains superstar economics before digital amplification made the phenomenon even more extreme.
Key Findings from Rosen (1981)
- Small talent differences yield large earnings differences
- Technology enables talent leverage across markets
- Consumer preference for 'best' creates concentration
- Explains CEO, athlete, entertainer compensation patterns