No abstract

The recording industry for popular singers, 1955–1987, consisted of a lower‐end market for singles and a higher‐end market for albums. The singles market acted as an entry‐level quality filter for the album market. While this two‐tier market system might have led to the “superstar phenomenon” in the Marshall‐Rosen sense, other non‐quality factors, such as the singer's race or musical style, resulted in an imperfect quality filter, possibly explaining why the industry did not exhibit superstardom statistically.

Conventional finance models treat risky‐asset prices as “fully (information) revealing.” Less work exists on how prices become information revealing. Our answer focuses on the micro foundations of information acquisition and the role of human capital in “asset management.” We derive testable propositions on how education and the opportunity cost of asset management affect risky‐asset demand, portfolio returns, asset‐price volatility, and equity premiums. Using micro‐level data, we find that education raises the portfolio share of risky assets and overall portfolio returns, whereas wage rates exert opposite effects. We find that the rate of return to education in generating nonwage income is nontrivial.

This article examines the implications of exceptions to the National Football League's (NFL) earlier principles of financial equity and competitive parity across teams. The exception to financial equity is that revenue from premium seating is not shared. The exception to competitive parity is that the salary cap, used to engender parity, does not include coaching salaries. The fact that teams, along with stadium owners, can exchange general seating for premium seating makes the degree of revenue sharing an endogenous variable. Empirical evidence suggests that teams in larger, wealthier markets have a greater incentive to increase the number of premium seats, and thus reduce the degree of revenue sharing, and to acquire greater coaching talent. The evidence also indicates that teams in larger, wealthier markets earn significantly more revenue, much of which is unshared revenue, and on the margin, have a greater probability of making the playoffs.

An earlier draft of this paper was presented in a conference honoring Robert Lucas Jr., at Clemson University on September 16-18, 2007. We are indebted to Gary Becker for important suggestions on a recent draft, and to the participants in the Clemson conference for useful comments on an earlier draft. We are also indebted to Francis Lui and Stephen Turnovsky, who served as editors for this paper, and to an anonymous referee for very helpful comments. We are especially indebted to Jong Kook Shin for excellent research assistance and important suggestions. We alone are responsible for errors. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.