economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

, a winner-take-all market is a market in which a product or service that is favored over the competitors, even if only slightly, receives a disproportionately large share of the revenues for that class of products or services. It occurs when the top producer of a product earns a lot more than their competitors. Examples of winner-take-all markets include the sports and entertainment markets. The distribution of rewards for different amounts of work determines the degree to which a market is considered winner-take-all. For example, most

lottery games A lottery is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of ...

are 100% winner-take-all systems because one person takes the entire reward and the rest receive nothing. On the other hand, most manual work, such as picking apples, is the opposite of a winner-take-all system. In this apple-picking example, the reward is proportional to the amount picked — a person who picks only one box of apples still gets rewarded proportionally. There are also intermediate cases. For example, in Olympic competition, only the top three individuals or teams are rewarded with medals, but other finishers receive lesser rewards such as

bragging rights Boasting or bragging is speaking with excessive pride and self-satisfaction about one's achievements, possessions, or abilities. Boasting occurs when someone feels a sense of satisfaction or when someone feels that whatever occurred proves thei ...

and publicity. Although some markets (such as lottery games) are designed to be winner-take-all, there are some markets that evolve to become winner-take-all. For example, the piano market was not winner-take-all before

rail transportation Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a prep ...

, whose growing availability and popularity resulted in leading piano makers became progressively larger and capturing more of the piano market, while smaller competitors disappeared over time. (See the

Matthew effect The Matthew effect of accumulated advantage, Matthew principle, or Matthew effect, is the tendency of individuals to accrue social or economic success in proportion to their initial level of popularity, friends, wealth, etc. It is sometimes summar ...

, in which "

the rich get richer and the poor get poorer "The rich get richer and the poor get poorer" is an aphorism due to Percy Bysshe Shelley. In '' A Defence of Poetry'' (1821, not published until 1840) Shelley remarked that the promoters of utility had exemplified the saying, "To him that hath, ...

".) The term "winner-take-all" as applied to economic markets was popularized by a 1996 book by

Robert H. Frank Robert Harris Frank (born January 2, 1945) is the Henrietta Johnson Louis Professor of Management and a professor of economics at the Samuel Curtis Johnson Graduate School of Management at Cornell University. He contributes to the "Economic View" ...

and

Philip J. Cook Philip Jackson Cook (born October 15, 1946) is the ITT/Terry Sanford Professor of Public Policy at the Sanford School of Public Policy at Duke University in the United States. He also holds faculty appointments in Duke's departments of sociology, ...

References

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Winner-Takes-All Market
Free market {{marketing-stub