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Hello there. 🎤 Welcome. You’re tuning into Revise and Resubmit, and this is our special episode: Weekend Classics. ✨

Think about success. Why does one actor earn millions per film? 🎬 Why does one musician sell out stadiums across the globe? While another, almost as talented, plays to a half-empty bar on a Tuesday night. Is it just talent? Is it luck? Is it some magic formula? 🧪

The answer is complicated. It’s fascinating. It’s economics.

Back in December 1981, an economist from the great American academic tradition, a man with links to the University of Chicago and Stanford, decided to crack this very code. His name was Sherwin Rosen. Rosen looked at the world and saw a strange pattern. A few people at the very top were not just earning a little more; they were earning astronomically more. He gave this phenomenon a name. He called it "The Economics of Superstars." 🌟

He argued that in certain markets, there is no substitute for the best. You can't hire two decent singers to replace one Beyoncé. 👑 Technology, even the humble radio and television of his time, acted as a massive amplifier, taking one person's talent and broadcasting it to millions, creating a convex relationship where a tiny bit more talent results in a mountain of income. 📈 It’s a world where the winner doesn't just take all; the winner takes… everything.

Rosen wrote this foundational text in a world without TikTok, without YouTube, without the global, instantaneous reach of the internet we know today. Which leads to a curious question… if the technology of 1981 created superstars, what kind of terrifying, winner-takes-all monster is our modern algorithm-fueled world building right now? 🤔

A massive thank you to the brilliant Sherwin Rosen for this timeless paper, and to the American Economic Association for publishing it in The American Economic Review. 🙏

If you love diving deep into classic academic ideas, make sure you subscribe to our podcast, "Revise and Resubmit," on Spotify, Amazon Prime, and Apple Podcast! 🎧 And don't forget to check out our visuals and other research content by subscribing to our YouTube channel, "Weekend Researcher." 📺

Reference

Rosen, S. (1981). The Economics of Superstars. The American Scholar, 52(4), 449–460. https://www.jstor.org/stable/41210977

‌Open Access Paper Link: https://home.uchicago.edu/~vlima/courses/econ201/Superstars.pdf

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