PENGUINB OOKS THE WINNER-TAKE-ASLOLC IETY RoberFtr aniksG oldwSimni tPhr ofesosfEo cro nom­ icEst,h iacnsd,P ublPiocl iactCy o rnelUln ievrsiatnyd is the oafua,tm hoonrog t hebro okCsh, ootshiReni gg ht PonHde .li vienIs t haNceaw,Y ork. PhilCiopo ki sI TTI TerSrayn foPrrdo fesosfPo urb lic Poliacty DuUknei verasnidti yst hea utho(rw ith CharlCelso tfeolftS eerll) iHnogp Set:a Ltoeet rtiiens Ameirc.Ha e livienCs h apHeilll N,o rtCha rolina. The Winner-Take-All Society Whyt heF ewa tt heT opG etS o MuchM oreT hant heR esotf U s ROBERTH .F RANK ]. PHILIPC OOK PENGUIN BOOKS PENGUIBNO OKS Publibsyht ehPdee ngGurionu p PenguBiono kUsSA I nc3.7,H5 u dsoSrnte et, NewY orNke,w Y or1k0 01U4.,S .A. PengBuoion ks 2L7Wt rdi,g LhatnsLe o,n dWo8n5 TZE,n gland PengBuoionk Asu strLatldRi,ia n gwoVoidc,t oAruisat,r alia PengBuoionk Csan aLdtad1 ,0A lcoArnv enue, ToronOtnot,a rCiaon,aM d4aV 3 B2 PenguBoino k(sN .ZL.t)d1 ,8 2-1W9a0i rRaoua Adu,c kl1a0nN,de wZ ealand PenguBiono kLst dR,e gisOtfefirceHedas r:m ondsMwiordtdhl,eE snegxl,a nd Firpsutb liisnth heUedn itSeatdt oefsA meribcyTa h Fer ePer ess, ad iviosfSi moionn& ShcusItnecr1. 9 95 PubliisPnh eendg Buoionk 1s9 96 3 5 7 190 8 6 24 Copyr©i Rgohbte Hr.Ft r anaknP dh ilCiopo]k.1, 9 95 Alrli grhetsse rved THEL IBRAROYF C ONGRESHSA SC ATALOGUTEHDE H ARDCOVEARS F OLLOWS: FranRko,b eHr.t Thew inner-take-allH-.sF orcainaekntP dyh liRloCibopeo]rk.t. p.c m. Inclubdiebsl iogrraepfheiracenanidcln e dse x. ISB0N- 02-87(4h0c3.4)- 3 ISB0N1 40 2.539( 9p5b k.) 1C.o mpetit2iF.oa nm.e -Econaosmpiecc3 t.Ss uc.c ess. 4.S cuceisnbs u sines5sC..o nsumer be6hI.an vciodomires. t ribution. 1.C ooPkh,i Jl.iI pI T.i tle. HB238.F7139 95 306.4-dc9250- 13340 Prinitnte hdUe n itSeatdt oesfA merica Stei nS mioncGianria mond Exceipntt h Uen itSeatdt oefsA meritchabi,os o ikss o lsdu bjteotc htce o ndition thaistth anllo tb,yw ayo ft raodroe t herwbiesl ee,nr te,- shoilrdoe,ud to ,ro ther­ wiscei rcuwliatthetodhu petu blisphreicroo'rns s ienan ntfy o romfb indoirn g cover tohtathnhe airtnw hiicithps u bliasnhwdei dt haos uitm icloanrd ition inclutdhicinosgn dibteiionng iomnpt ohsseue bds eqpuuerncth aser. ForMam -R.H .E FoJr udy -p.c].. Contents PrefacVell AcknowledgmenIXt s 1.W mner-TakMea-rAklelt s 1 2.H owW mner-TakMea-rAklelAt rsi se 23 3.T heG rowht ofWmner-TaMkaer-kAeltls 45 4.R unaway Inactto hmTee osp 61 5.M inor-LeSaugpueer stars 85 6.T ooM anyC ontestants? 101 7.T heP robloefWm a steIfunlv emsetnt 125 8.T heB attfloeEr d ucatiPorneaslt ige 147 9.C uribngW asteCfuolm petition 167 10.M ediaan dC ultuirnte h e Wmner-Take-All So1c8i9e ty 11.O lWd me inN ewB otltes 211 Notes 233 Bibliograph2y4 7 Index2 61 Preface I maginteh ayto ua ndt wof riehnadvsbe e etno ltdh aatn a nonymous benefachtaosdr o nattehdr eheu ndrtehdo usadnodl latrods i vide amonygo uH.o w woulydo us pliittIf? y oua rlei kmeo spte oplyeo,u woulidm mediaptreolpyo ans ee quadli visionh-uonnder tehdo u­ sanddo llpaerprse rson. Yetd espiittoesb viofuosr cteh,ea ttracotfei qouna liisft ayfrr o m absoluItned.e eidti, sq uickltyru mpebdy o thecro ncewrnsh enw e make trhuelf eosdr i stributiinngm owdeeamml atrhk eetc onomies. Wealtahf,ta ellrg, e nerdaolelsycn o'mtef roamn onymobuesn efactors; wem usptr oduicteIn. a l aregceo no,mif y eacphe rswoenr geu aran­ teeadn e quaalm ounotfi ncomfee,ww oulidn veisnet d ucatoirio nn developsipnegct iaalle nftesww, o ulwdo rkh aradn dt akrei skWse. thucso nfrano natg oniztirnagd e-tohfeefc ,o nomitsetlusslb , e tween equalaintdey c onompirco spteyA.rn ids oif,o nlrye luct,wa ena tclqyui­ escteom arkfeotr cwehsi,cr he wapredo pilnre o ugphr oporttoit ohne markveatl uofet hteh intghsep yr oduce. Inr eceyneta rhso,w evoeurr,wil lin gnestso r eloyn m arkefto rces hasb ecomset rainaestd h sea larioeft so pp erformehrasvg er owenx ­ plosievveelanys m ospte ophlaev set ruggtloh eodl tdh eoiwrn T. hese changleesnn de wu rgentcooy u rq uesttou nderstwahnysd o mep eo­ pleea rns om uchm orteh aont hers. The usuaelx planatoifio nncso mdei fferetnackeoesn eo ft wo tackTshe. fi rsetm phasiiznedsi vipdruoadlu ctainvdri etlya qteuda li­ tieisn,c ludeidnugc ateixopne,r ieunncieq,ut ea lenttesm,p erament, drivaen,di ntelligeTnhecs ee.c osntdr estshseets r ucotfuo rpep ortuni- Vlll Pr/aece tieass,s ertthianttgh en umbeorfg oojdo bissl imiatneddt haatl ­ thoutgahl eanntde fforatrc el eairmlpyo rtlauncatkn, dw hoy ouk now alsmoa tter. Botphe rspecsteievmte ocs a ptuirmep ortant oeflr eematelyn,it s buwth icphr ovitdhebese ttaecrc ouonfrt e cetrnetn dIss?gr owinign ­ equalliatrygt ehlreye suolfat n i ncreiants hede i spaorfii ntdyi vidual abili(taiase r se cebnets t-sTehlBleee rll, Cwuorvuelhd,a vues b e­ lievOer)d ?o eisst t efmr ocmh angients e chnotlhoahgtay v ceo ncen­ tratmeodr aen dm orlee veriantg heee c onomtyo'ppso sitions? Thet itloefo ubro ogki vaewsa oyu arn swWeerb :e litehvaietit st he distribuotfoi popno rtunniotitte hsed, i stribouftt ailoentn htah,ta s beecnh angiinntg h lea tswte nyteya Trhse.r easfoontr h is issph artliyft technoloAsgi tcharele .v oluitnii nofno rmaptrioocne sasnidtn rga ns­ missicoonn tintuheesir,sie n creasingf oltreh vteea rlaeognfett hso se whoo ccutpoypp o sitainodcn osrr espondliensrgsol oyfm o ort hetros finda l ucrantiicvhInee e.ff ectth,re e ward stcruocmtmuoirnnee nter­ tainmaenndts ports-wthheorues acnodmsp eftoear h andfuolfb ig prizaetts h teo p-hnaosw p ermeamtaendoy t hseerc toofrt she ec on­ omy.W e will descrtihbfeeo rctehsah ta vcea ustehdit sr enadn de x­ plotrhee viarr ieocuosn omsiocc,ia anldc, u ltucroanls equences. Oura nalysis fidtco eosmnf'otr tianbtlaoyn yonei ntellectual campW.e proceaesed c onomiasrtmsew,di tthh per esumptthiaotn markewtosr ka ndo bserved trendusn derrelfeylcieoncgnt o mic forcBeus.tu nlimkaen ye conomiwset cso,n clutdheam ta rkets havenb'etes ne rvitnhgep ublic interewsetl olfel sapteec-iianl­ly deedt,h amtu cho ft hrei vaflorsryo ciettoypp' rsi ziesbs o th costly andu nproducAtniduv neli.k vei rtuaalolltl hyee cro nomiwsect osn,­ cludteh arti siinnge quailismt oyr lei kteolcy u rtatihla tnos timulate economgriocwt h.O urm essaigste h uash opefounleIn : t hwien ner­ take-saoelctliyc ,o operaatgirveee mteonr tesd utchese i zoeft hteo p prizaensdc ursbo mfeo rmosfc ompetinteieondno tl eaidn evitably tos ociasliqsuta lOonrt .hc eo nrta,rs yucahg reemaernteth ske e ty oa moreeq uitaabnmldoe r per ospefurtouurse . Acknowledgments O urw orokn t hper ojbeecgta fno rmailn1l 9y8 8b,u to urc ollabora­ tiorne adllaytfr eosm c onversaatsci loansss maantdoe ffisc em ateisn Berkeleecyo'nso mPihc.sDp .r ogrmaomr teh atnw entyy-efiavaregs o . Du�itnhgee n suiynega rwsew, o rkseedp araotnte hleeyc onomoifc s statcuosm petiatnidoo fpn a rticipianlt oitotne Triheesste.w oa reaats firsste emetdoh avlei titncl oem monb,u ats t he1 980psr ogreists ed becamaep partehnatt ctohmep etiftoisroo nc iettoypp' oss itwiaosn s becomimnogr aen dm orlei kpea rticipianat l iootnt Aenrdywi .t ht his realizcaatmieto hned ecistioom ne rgoeu rr eseaprrcohg raamnsd begiwno rokn T hWei nnerT-ake-SAollci .e ty Aso urp rojeucntf oldweedh ,a vbee nefitferdo am dvifcreo m manyq uartOeurrsg. r eatceusmtu ladteibvitest ot hosweh os uf­ fered througrhe ppororontog sur rew sosr kF.o rt hecioru ntless use­ fuslu ggestainodin nss igwhett sh,a ntkh ep articiipnfa anctusl ty seminaartBs e rke,l BeiynghamtBorni,t ish CoClaurmlbeitao,n , CentefroA rd vancSetdu diynth e BehaviSocriaeln cCehsi,c ago, ClaremoGnrta duaStceh ooClo,l umbiCao,r neClolr,n eLlalw SchooDla,l houDsuikee,G, e orgMea sonG,e orgSitaa tGee,o rgia TechG,u elpHha,rv arHda,rv arBdu sinSecshso oIlo,w aL,a fayette, LondoSnc hooolfE conomiMcisa,m oif O hioM,I T,N ational BureaoufE conomRiecs earNcehw,M exicoN,o rthwesOtheiron , StatOer,e g,oP nennsylvRaunsisaSea,lg lFe o undatSiaonntC,al ara, SoutheCranl ifoSrntiaan,f oSrtda,n fLoarwdS chooTlo,r onLtaow SchooTlu,ft sW,a shington, WashLionugiWtseo,sn l-eSytWa.en s,t ­ ernO ntarWiiol,l iaanmdsY ,a lLea wS chool.