Substitution and superstars

Tim Perri

Economics Letters, 2014, vol. 125, issue 2, 240-242

Abstract: The existing superstar model (Rosen, 1981) does not require imperfect substitutes, and the convexity of total earnings with respect to talent is due to greater output for those with more talent. Our model explains why wages would increase at an increasing rate in talent. Imperfect substitutability between non-superstars and superstars with probabilistic production results in convexity in wage rates.

Keywords: Superstars; Imperfect substitutes; Convex wages (search for similar items in EconPapers)
JEL-codes: D11 D31 J31 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Substitution and Superstars (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:125:y:2014:i:2:p:240-242

DOI: 10.1016/j.econlet.2014.08.032

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