Bundling electronic journals and competition among publishers
AbstractSite licensing of e-journals has been revolutionizing the way academic information is distributed. However, many librarians are concerned about the possibility that publishers might abuse site licensing by practicing bundling. In this paper, we analyze the private and social incentives for the publishers to use bundling in the context of STM electronic journal market. In the short run in which the number of journals is exogenously given, we find a strong conflict between the two incentives: each publisher finds bundling optimal and bundling increases the industry profit but reduces social welfare. However, in the long run we find that publishers might have higher incentives to introduce new journals under bundling than without bundling and, in this case, bundling can reduce the industry profit while increasing social welfare. Finally, we examine publishers’ incentive to provide links to the websites of the rival publishers under bundling and show that even asymmetric publishers have incentive to interconnect.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 678.
Date of creation: Apr 2003
Date of revision: Aug 2005
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Web page: http://www.econ.upf.edu/
Bundling; site licensing; interconnection; merger;
Other versions of this item:
- 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.
- Doh-Shin Jeon & Domenico Menicucci, 2005. "Bundling Electronic Journals and Competition among Publishers," Working Papers 270, Barcelona Graduate School of Economics.
- domenico menicucci & doh-shin jeon, 2004. "bundling electronic journals and competition among publishers," Econometric Society 2004 Far Eastern Meetings 720, Econometric Society.
- D4 - Microeconomics - - Market Structure and Pricing
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-26 (All new papers)
- NEP-COM-2004-05-16 (Industrial Competition)
- NEP-HPE-2004-05-26 (History & Philosophy of Economics)
- NEP-LAW-2004-05-16 (Law & Economics)
- NEP-MIC-2004-05-26 (Microeconomics)
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