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The Pricing of Academic Journals: A Two-Sided Market Perspective

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Author Info
Doh-Shin Jeon ()
Jean-Charles Rochet

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Abstract

More and more academic journals adopt an open-access policy, by which articles are accessible free of charge, while publication costs are recovered through author fees. We study the efficient pricing of an academic journal from a two-sided market perspective and the consequences of the open access policy on the journal’s quality standard. When the journal’s objective is to maximize social welfare, open access is optimal if and only if the positive externalities generated by its diffusion exceed the marginal cost of distribution. This condition is satisfied in particular for an electronic journal for which the marginal cost of distribution is zero. However, we show that if the journal is run by a not-for-profit association that has a different objective (such as maximizing the utility of its readers or the impact of the journal), the move from the traditional reader-pays model to the open-access model may result in a decrease in quality standard below the socially efficient level. In some cases, it may even lead to a reduction in readership size.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/1025.pdf
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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1025.

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Date of creation: Mar 2007
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Handle: RePEc:upf:upfgen:1025

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Web page: http://www.econ.upf.edu/

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Related research
Keywords: Academic Journals Open-Access Reader-Pays Two-Sided Market Endogenous Quality

Other versions of this item:

Find related papers by JEL classification:
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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References listed on IDEAS
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  1. Jean-Charles Rochet Author-Email: rochet@cict.fr Author-Workplace-Name: IDEI, University of Toulouse & Jean Tirole Author-Email: tirole@cict.fr Author-Workplace-Name: IDEI, University of Toulouse, 2006. "Two-Sided Markets: A Progress Report," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 645-667, Autumn.
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  2. Mark J. McCabe & Christopher M. Snyder, 2005. "Open Access and Academic Journal Quality," American Economic Review, American Economic Association, vol. 95(2), pages 453-458, May. [Downloadable!] (restricted)
  3. Mark Armstrong Author-Email: mark.armstrong@ucl.ac.uk, 2006. "Competition in Two-Sided Markets," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 668-691, Autumn.
    Other versions:
  4. ROCHET, Jean-Charles & TIROLE, Jean, 2003. "Platform Competition in Two-Sided Markets," IDEI Working Papers 152, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  5. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
  6. Mark McCabe, 2004. "Information goods and endogenous pricing strategies: the case of academic journals," Economics Bulletin, Economics Bulletin, vol. 12(10), pages 1-11. [Downloadable!]
  7. Jean-Charles Rochet & Jean Tirole, 2002. "Cooperation Among Competitors: Some Economics Of Payment Card Associations," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 549-570, Winter.
  8. Doh-Shin Jeon & Domenico Menicucci, 2006. "Bundling Electronic Journals and Competition among Publishers," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 1038-1083, 09. [Downloadable!] (restricted)
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  9. Andrei Hagiu, 2006. "Pricing and Commitment by Two-Sided Platforms," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 720-737, Autumn.
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