The 2014 Winter Olympics games are now behind us. The cascade of newly created celebrities sparks a reflection about the winner-take-all phenomenon: The asymmetry of rewards, where the winner reaps an outsize share of the rewards in the game, leaves little or nothing behind for the others.

This seems unfair, especially for those who trained thoroughly, played hard, observed the rules and finished second … or last. Olympic gold medalists benefit disproportionately from endorsement revenues, speaking fees and the like. The same is often true for top performing artists, sports figures and CEOs.

Robert Frank and Philip Cook, in their classic book, “The Winner-Take-All Society,” wrote “winner-take-all markets translate small differences in performance into large differences in reward.” They identified a range of attributes:

A focus on relative, rather than absolute, performance. In most markets, the reward from your effort is based on how many hours worked or how many widgets produced — those are examples of absolute performance. But in some settings, absolute performance does not yield the reward; what matters is being better than competitors. The focus on relative performance differentiates the winner from the rest.

Concentration of rewards “in the hands of a few top performers, with small differences in talent or effort often giving rise to enormous differences in incomes,” Frank and Cook wrote.

Overcrowding. For every rock star, there are many thousands of “wannabes.” The focus on relative performance and resulting asymmetric payoffs tend to draw into the competitive field more contestants than may be warranted on any rational calculation of benefits and the probability of winning. All of this leads to “tragedy of the commons” in that too many also-rans depress the per-capita compensation for them. Frank and Cook point to a variety of causes of overcrowding, such as overconfidence; thrill-seeking; status-seeking, or intrinsic joy in the activity.

The rise of mass markets for some kinds of talent (such as prizefighting on cable TV) that makes it possible to reach a very large audience and leads to outsize purses to the winner.

Network effects can create winners who take all. Consider that a product can become more valuable the more people use it. The fax machine is a prime example, as is Microsoft’s Windows software.

Lock-in or barriers to exit. Microsoft Windows illustrates another aspect of winner-take-all markets: Apparent customer loyalty might be driven by the cost and inconvenience of switching to a competitor.

Feedback loops. Being known as a leader may enhance your chances of remaining a leader in future rounds of competition. Think of the movie director who gets bankrolled on the basis of past film successes, or the Grand Slam tennis pro who gets top-seeding in subsequent tournaments. In business, the saying was, “You never get fired by buying IBM.” Of course, the feedback loops can work in a negative direction.

The emergence of “deep-pockets markets,” which Frank and Cook describe as “a small number of buyers intensely interested in the winner’s performance.” The market for expensive art, yachts and professional services, such as law, asset management or investment banking. Customers in these markets want the very best and are relatively price-insensitive.

Markets for status or positional goods. Economist Thorsten Veblen first identified “conspicuous consumption” as a phenomenon in economic behavior. Perhaps people buy luxury goods not because they are better made, but because they signal success, exclusivity and taste, and therefore help to attain higher social status.

Information revolution. We are flooded with free and easily accessible information that helps us make relative comparisons, such as “likes,” ratings, rankings and customer comments. More is known about products and their relative positions. The advent of information technology has undoubtedly intensified the winner-take-all phenomenon through transparency that helps one to compare relative positions.

The problems with winner-take-all markets, as Frank and Cook see it, have to do with wasteful investment, overwork to try to stay competitive with peers or over allocation of talent to a field of marginal benefit to society (how many oboists or hedge fund traders does the world need?)

America values equality of opportunity. But strict equality often imposes its own tyranny. And life is full of unfair advantages. You might envy your neighbor’s good looks — do you really feel that society owes you a surgical makeover?

Is the downside of failure in a winner-take-all market always catastrophic? In his article on winner-take-all, Sherwin Rosen wrote, “There is compelling empirical evidence … that lawyers who do not make partner in big firms live as nicely as partners in smaller ones, that would-be Picassos live useful and rewarding lives as commercial artists, and similarly for just about every high-risk occupation. Some people who fail do suffer disastrous consequences, but generally less is at stake in these gambles than meets the eye.”

You can debate the impact of the winner-take-all phenomenon, but I would advise you not to deny its existence or relevance. Business students are making career choices this season. And it looks like the secondary market for talent is heating up. Several entrepreneurs have whispered to me that they are about to start businesses. In these and other contexts, relative positioning can matter a lot — and this means that you face potential asymmetric payoffs characteristic of winner-take-all. Such markets are clearly not for the faint-of-heart: the failure rate is very high; the field will likely be crowded; competitors probably overinvest; competition may grow intense and even unethical; and ultimately the difference between the winners and the rest may be scant.

Here are a few questions to consider:

In the place to which I’m headed, how important in their evaluation will be relative performance vs. absolute performance?

On what basis is performance assessed?

In producing such performance, how significant are effects such as reputation/branding, lock-in, status, mass-markets, and deep pockets?

How crowded is the field of competition?

How have the rewards been distributed in the past? How asymmetric is that distribution?

How much transparency is there regarding the distribution of rewards?

And the really big one: How much time, talent and treasure am I willing to invest in an effort to win?

Robert F. Bruner is dean of the University of Virginia’s Darden School of Business.