This paper offers empirical evidence which counters two opposing but frequently expressed views concerning the market for popular music. The first view is that the consumers of popular music have no recognition of or appreciation for "quality" or "ability" in singing. The second is that the market is an example of the "Superstar Phenomenon, " in the Marshall-Rosen sense, wherein small differences in ability are magnified into disproportional levels of success. Using an external measure of "voice quality, " provided by the literature on voice, the estimated elasticity of record sales to voice quality is found to be significantly greater than zero but less than one.

The simple Shapley allocation has been recently proposed by several authors as a useful allocation scheme in the joint cost allocation problem. However, while satisfying several useful allocation axioms, it does have a least two debilities. First, it is a unique solution and does not permit any flexibility by management. Second, it may fail to satisfy the core conditions in many relevant situations, causing independent action by subcoalitions of divisions which is to the detriment of the corporation. A generalization of the simple Shapley allocation is proposed which maintains most of the favorable properties of the simple Shapley allocation while removing these two weaknesses.

The problem of joint cost allocation is examined with particular emphasis on the possibility that some allocation schemes may result in divisional decisions which are suboptimal at the corporate level. Such decisions may arise whenever the marginal cost function for the allocated cost is decreasing, and the joint cost allocation scheme results in a charge to a division (or group of divisions) which exceeds the charge which that division (or group of divisions) could incur by acting independently. The theory of the core is used to establish criteria that any cost allocation scheme should meet if it is to avoid encouraging these suboptimal decisions. Four cost allocation schemes are studied and evaluated using the core criteria. It is shown that three of these schemes, including the activity level allocation scheme, satisfy the core criteria; however, a fourth scheme, which was recently proposed, is satisfactory in only certain cases.