The Superstar Effect: What Happens In A Winner Takes All World

Louis Chew
7 min readJun 23, 2020

When Michael Jordan came out of the University of North Carolina, he was selected by the Chicago Bulls as the 3rd overall pick in the 1984 NBA Draft. Top draft picks typically go on to have respectable careers, but no one could have imagined what this junior out of college would do.

Six NBA championships, 5 MVPs, and 2 Olympic gold medals later, Michael Jordan has definitely made his case. ESPN named him the greatest North American athlete of all time. The Jordan line of shoes recorded over $1 billion in sales in the last quarter of 2019. There’s even a 10-part miniseries on Netflix chronicling his career.

Michael Jordan’s fame isn’t surprising. What’s surprising is that we know so little about the other basketball stars of that era, especially since it was the time when the NBA started appearing on television screens. Fans might be able to name every member of the star-studded 1992 Olympic Dream Team. But ask anyone else, and they would only be able to tell you that Jordan was on that team.

Winner Takes All — And Then Some

This phenomenon is probably best described as a winner-takes-all effect. Jordan may have been the best basketball player during his time — and possibly of all time — but his peers weren’t slouches either. Yet when you look at how fame and fortune has been distributed within the basketball world, it’s easy to forget that everyone in the NBA is in the 99.99th percentile of all players.

It goes beyond basketball. Superstars in every field reap disproportionately larger rewards than their slightly less talented peers. The economist Sherwin Rosen even published a paper titled The Economics of Superstars to mathematically demonstrate and explain the effect. The intuition is simple — if I only need one product or service, I might as well get the best, assuming all else is equal. Second place doesn’t count for much.

The inequality doesn’t stop there. Once the winner gains an initial advantage, additional advantages are likely to accrue because he is now in a better position to compete for limited resources once again.

In the world of publishing, well-known authors are more likely to reach a book deal with a publisher than unknown…

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Louis Chew

I explore underappreciated ideas. Currently writing about tech and business in Southeast Asia - check out mathnotmagic.substack.com.