Description:
Superstars exist in classrooms and workplaces. Superstars can either intimidate others by making their peers put in less effort, or they can encourage others by inspiring everybody to “step up” their game. In this study, we analyze direct and indirect effects of a superstar on their peers using evidence from chess. We find that the direct superstar effect is always negative. The indirect superstar effect depends on the intensity of the superstar: if the skill gap between the superstar and the rest is small (large), there is a positive (negative) peer effect