Week 8 - Starving Artists: Tournament Model

Question 1

What does Glenn MacDonald’s article “The Economics of Rising Stars” examine?

Answer 1

-examines why there is so much inequality of wealth in the arts

Question 2

Explain the tournament model

Answer 2

large numbers of people compete for a chance at an ultimate prize (in this case, superstardom)

Question 3

Tournament model process

Answer 3

-large number of entrants who aspire to be like successful artists
-people don’t know whether or not they’ll succeed, so they need to find out – feedback causes those who are bad to drop out
-repuation accumulates for someone who is good – information cascades drive higher wages to better performances
-leads to inequality

Question 4

Explain the tournament model in another field

Answer 4

-crack dealers on average make less than mimimum wage but want to work theri way up
-drug lord shows off his success to attract cheap labor who aspire to be like him

Question 5

What is a problem with the tournament model?

Answer 5

-doesn’t apply to all art forms
-for example, there aren’t really celebrity poets, yet people still work at it