The Superstar Effect

I think superstar effect might be valid if only one person is going to win. Clearly, some people have genetic and experience advantages that would take years for the superstar's competitors to achieve, and why exert the force given the implicit probability that you are going to lose is high? The situation changes where there are number of top spots. Sure there might be one or two superstars, but it is more likely that you would place in a top spot. I am talking about GE competition scheme with 20-70-10. I think, everybody would think that they can reach a top 20% spot. The employees would know some people are a guaranteed for those spots but the others are very much open to someone willing to work hard, so in this sense I don't think it impedes competitiveness.

this immediately made me think of 99designs.com

...but of course it applies everywhere

It seems pretty clear to me it's about the perceived differences in skill. If I played Bobby Fischer, I might be tempted to give up too- I've played chess maybe 50-100 times in my life.

In other words, if we see the opponent as within reach, or even just a little out of reach, we will struggle to get there. However, if we see the opponent as completely unreachable, it would be foolish to expend energy on an impossible task!

And as whatwhatwhat said, this effect applies EVERYWHERE. The psychological impact of 'first blood' in a fight, or shock-and-awe campaigns and other morale issues in armed forces also comes to mind.