Ranking Value and Preference: A Model of Superstardom

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.