One of his key insights was to explicitly model talent—labeled, innocuously, with the variable q in his formulas—as a factor with “imperfect substitution,” which Rosen explains as follows: “Hearing a succession of mediocre singers does not add up to a single outstanding performance.” In other words, talent is not a commodity you can buy in bulk and combine to reach the needed levels: There’s a premium to being the best. Therefore, if you’re in a marketplace where the consumer has access to all performers, and everyone’s q value is clear, the consumer will choose the very best. Even if the
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