Exceptional Agent
(Redirected from Superstar)
Jump to navigation
Jump to search
A Exceptional Agent is an agent that typically wins a game.
- AKA: Superstar.
- …
- Example(s):
- a Supermanager.
- an Economic Superstar.
- …
- Counter-Example(s):
- See: Income Inequality, Perverse Incentive.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/superstar#Economics_of Retrieved:2014-4-28.
- Sherwin Rosen (1981) examined the economics of superstars to determine why "relatively small numbers of people earn enormous amounts of money and seem to dominate the fields in which they engage." Rosen argues that in superstar markets, "small differences in talent at the top of the distribution will translate into large differences in revenue."[1] Rosen points out that "...sellers of higher talent charge only slightly higher prices than those of lower talent, but sell much larger quantities; their greater earnings come overwhelmingly from selling larger quantities than from charging higher prices" Modern microconomist Alfred Marshall explains that technology has greatly extended the power and reach of the planet's most gifted performers....He referenced a classical of the British opera singer Elizabeth Billington. She was a well-acclaimed soprano with a strong voice, that, naturally did not have access to a microphone or amplifier in 1798, let alone to MTV, CDs, iTunes, and Pandora. She could only reach a small audience. This limited her ability to dominate the market in the way that artists to do today. Marshall wrote, “so long as the number of persons who can be reached by a human voice is strictly limited, it is not very likely that any singer will make an advance on the £10,000 said to have been earned in a season by Mrs. Billington at the beginning of the last century, nearly as great [an increase] as that which the business leaders of the present generation have made on those of the last.” Furthermore, the trends in popular music indicate that "the price of the average concert ticket increased by nearly 400% from 1981 to 2012, much faster than the 150% rise in overall consumer price inflation. ===Debate over superstardom=== Some scholars argue that superstardom has a useful role in society. Caillois cites Rawls, who states that the "premiums earned by scarce natural talents . . . [serve] to cover the costs of training and to encourage the efforts of learning, as well as to direct ability to where it best furthers the common interest." Cowen (2000) cites Rosen (1981) to argue that "the superstars effect is welfare-improving (consumers get better performances) even if it leads to raising income inequality," and adds that the "superstar phenomenon should not be overstressed. Indeed, fame is a positive-sum game, not a negative nor a zero-sum one." Cowen states that "countervailing forces operate, such as a convergence of quality that limits the ability of the very best stars to dominate the market for long, or more radically the elastic supply of fame." This means that "when demand for fame increases, the numbers of prizes, rewards and whatever fame generating distinctions is rising too." On the other hand, it has been argued "compensation systems that resemble prizes [lotteries] can also create perverse incentives by discouraging cooperative behaviour and may encourage some contestants to disrupt the performance of competitors". As well, Frank and Cook (1995) have called "into question the way the winner-take-all markets operate, with their damaging features." They argue that the "winner-take-all payoff structure of competition for superstardom] generates a spiral of individual and social occupational waste, since it leads both to increasing (monetary and non-monetary) reward inequalities and to overcrowdings in the markets and occupations prone to an overestimation of one's chance to succeed." Thus as a result, they argue that "when excess numbers of contestants are induced to invest in performance enhancement in order to raise their individual odds of winning, these investments will be mutually offsetting and socially inefficient; end consumers may get more valuable products but the social costs are excessive."
- Sherwin Rosen (1981) examined the economics of superstars to determine why "relatively small numbers of people earn enormous amounts of money and seem to dominate the fields in which they engage." Rosen argues that in superstar markets, "small differences in talent at the top of the distribution will translate into large differences in revenue."[1] Rosen points out that "...sellers of higher talent charge only slightly higher prices than those of lower talent, but sell much larger quantities; their greater earnings come overwhelmingly from selling larger quantities than from charging higher prices" Modern microconomist Alfred Marshall explains that technology has greatly extended the power and reach of the planet's most gifted performers....He referenced a classical of the British opera singer Elizabeth Billington. She was a well-acclaimed soprano with a strong voice, that, naturally did not have access to a microphone or amplifier in 1798, let alone to MTV, CDs, iTunes, and Pandora. She could only reach a small audience. This limited her ability to dominate the market in the way that artists to do today. Marshall wrote, “so long as the number of persons who can be reached by a human voice is strictly limited, it is not very likely that any singer will make an advance on the £10,000 said to have been earned in a season by Mrs. Billington at the beginning of the last century, nearly as great [an increase] as that which the business leaders of the present generation have made on those of the last.” Furthermore, the trends in popular music indicate that "the price of the average concert ticket increased by nearly 400% from 1981 to 2012, much faster than the 150% rise in overall consumer price inflation. ===Debate over superstardom=== Some scholars argue that superstardom has a useful role in society. Caillois cites Rawls, who states that the "premiums earned by scarce natural talents . . . [serve] to cover the costs of training and to encourage the efforts of learning, as well as to direct ability to where it best furthers the common interest." Cowen (2000) cites Rosen (1981) to argue that "the superstars effect is welfare-improving (consumers get better performances) even if it leads to raising income inequality," and adds that the "superstar phenomenon should not be overstressed. Indeed, fame is a positive-sum game, not a negative nor a zero-sum one." Cowen states that "countervailing forces operate, such as a convergence of quality that limits the ability of the very best stars to dominate the market for long, or more radically the elastic supply of fame." This means that "when demand for fame increases, the numbers of prizes, rewards and whatever fame generating distinctions is rising too." On the other hand, it has been argued "compensation systems that resemble prizes [lotteries] can also create perverse incentives by discouraging cooperative behaviour and may encourage some contestants to disrupt the performance of competitors". As well, Frank and Cook (1995) have called "into question the way the winner-take-all markets operate, with their damaging features." They argue that the "winner-take-all payoff structure of competition for superstardom] generates a spiral of individual and social occupational waste, since it leads both to increasing (monetary and non-monetary) reward inequalities and to overcrowdings in the markets and occupations prone to an overestimation of one's chance to succeed." Thus as a result, they argue that "when excess numbers of contestants are induced to invest in performance enhancement in order to raise their individual odds of winning, these investments will be mutually offsetting and socially inefficient; end consumers may get more valuable products but the social costs are excessive."
1981
- (Rosen, 1981) ⇒ Sherwin Rosen. (1981). “The Economics of Superstars.” In: The American economic review.
- QUOTE: The phenomenon of Superstars, wherein relatively small numbers of people earn enormous amounts of money and dominate the activities in which they engage, seems to be increasingly important in the modern world.