Abstract
When studying the reasons why and the conditions under which superstars emerge in some markets, scholars face difficulties in measuring talent, obtaining confidential data on earnings, and finding appropriate econometric techniques that cope with the presence of outliers (superstars). In this paper, we use a dataset from the Pokemon trading card game in which (i) there is no unidentifiable heterogeneity, (ii) rarity can be separated from talent, and (iii) objective earnings are observable through transaction prices. Using various parametric or semiparametric estimation techniques, we confirm that the relationship between talent and economic success is convex. On top of that, we document the existence of a different category of superstars with inferior talent and short-lived economic success.
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