IDEAS home Printed from https://ideas.repec.org/h/eme/reinzz/s1049-258520140000022015.html
   My bibliography  Save this book chapter

Tournaments and Superstar Models: A Mixture of Two Pareto Distributions

In: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting

Author

Listed:
  • Abdoul Aziz Ndoye
  • Michel Lubrano

Abstract

We provide a Bayesian inference for a mixture of two Pareto distributions which is then used to approximate the upper tail of a wage distribution. The model is applied to the data from the CPS Outgoing Rotation Group to analyze the recent structure of top wages in the United States from 1992 through 2009. We find an enormous earnings inequality between the very highest wage earners (the “superstars”), and the other high wage earners. These findings are largely in accordance with the alternative explanations combining the model of superstars and the model of tournaments in hierarchical organization structure. The approach can be used to analyze the recent pay gaps among top executives in large firms so as to exhibit the “superstar” effect.

Suggested Citation

  • Abdoul Aziz Ndoye & Michel Lubrano, 2014. "Tournaments and Superstar Models: A Mixture of Two Pareto Distributions," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 449-479, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520140000022015
    DOI: 10.1108/S1049-258520140000022015
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1049-258520140000022015/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1049-258520140000022015/full/epub?utm_source=repec&utm_medium=feed&utm_campaign=repec&title=10.1108/S1049-258520140000022015
    Download Restriction: no
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1049-258520140000022015/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://libkey.io/10.1108/S1049-258520140000022015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michel Lubrano & Zhou Xun, 2021. "The Bayesian approach to poverty measurement," AMSE Working Papers 2133, Aix-Marseille School of Economics, France.
    2. Majda Benzidia & Michel Lubrano, 2016. "A Bayesian Look at American Academic Wages: The Case of Michigan State University," AMSE Working Papers 1628, Aix-Marseille School of Economics, France.
    3. Edwin Fourrier-Nicolaï & Michel Lubrano, 2020. "Bayesian inference for TIP curves: an application to child poverty in Germany," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 91-111, March.
    4. Majda Benzidia & Michel Lubrano, 2020. "A Bayesian look at American academic wages: From wage dispersion to wage compression," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(2), pages 213-238, June.
    5. Kotrba, Vojtěch, 2019. "Direct preferences of sports fans: Is there a superstar effect in the fantasy league?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 89-97.

    More about this item

    Keywords

    Pareto distribution; superstars; tournament theory; wage inequality; D03; D33; D41; J31; J33;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:reinzz:s1049-258520140000022015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.