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Optimal Pricing and Quality of Academic Journals and the Ambiguous Welfare Effects of Forced Open Access: A Two-sided Model

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  • Mueller-Langer, Frank
  • Watt, Richard

Abstract

We analyse optimal pricing and quality of a monopolistic journal and the optimality of open access in a two-sided model. The predominant aspect of the model that determines the quality levels at which open access is optimal is the nature of the (non-linear) externalities between readers and authors in a journal. We show that there exist scenarios in which open access is a feature of high-quality journals. Besides, we find that the removal of copyright (and thus forced open access) will likely increase both readership and authorship, will decrease journal profits, and may increase social welfare.

Suggested Citation

  • Mueller-Langer, Frank & Watt, Richard, 2013. "Optimal Pricing and Quality of Academic Journals and the Ambiguous Welfare Effects of Forced Open Access: A Two-sided Model," Discussion Papers in Economics 16277, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenec:16277
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    References listed on IDEAS

    as
    1. Theodore C. Bergstrom, 2001. "Free Labour for Costly Journals?," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 183-198, Fall.
    2. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-143, Summer.
    3. Oster, Sharon, 1980. "The Optimal Order for Submitting Manuscripts," American Economic Review, American Economic Association, vol. 70(3), pages 444-448, June.
    4. Doh-Shin Jeon & Jean-Charles Rochet, 2010. "The Pricing of Academic Journals: A Two-Sided Market Perspective," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 222-255, May.
    5. 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.
    6. Glenn Ellison, 2002. "The Slowdown of the Economics Publishing Process," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 947-993, October.
    7. 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, September.
    8. repec:cdl:ucsbec:16-01 is not listed on IDEAS
    9. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
    10. Daniel S. Hamermesh, 1992. "The Young Economist's Guide to Professional Etiquette," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 169-179, Winter.
    11. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    12. Mark McCabe, 2004. "Information goods and endogenous pricing strategies: the case of academic journals," Economics Bulletin, AccessEcon, vol. 12(10), pages 1-11.
    13. repec:ebl:ecbull:v:12:y:2004:i:10:p:1-11 is not listed on IDEAS
    14. McCabe Mark J & Snyder Christopher M., 2007. "Academic Journal Prices in a Digital Age: A Two-Sided Market Model," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-39, January.
    15. Heintzelman Martin & Nocetti Diego, 2009. "Where Should we Submit our Manuscript? An Analysis of Journal Submission Strategies," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-28, September.
    16. Müller-Langer, Frank & Watt, Richard, 2010. "Copyright and Open Access for Academic Works," MPRA Paper 24095, University Library of Munich, Germany.
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    18. Mark J. McCabe & Christopher M. Snyder, 2005. "Open Access and Academic Journal Quality," American Economic Review, American Economic Association, vol. 95(2), pages 453-459, May.
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    Cited by:

    1. Frank Mueller-Langer, 2014. "Copyright and parallel trade," Chapters,in: Handbook on the Economics of Copyright, chapter 16, pages 287-310 Edward Elgar Publishing.

    More about this item

    Keywords

    Two-sided markets; academic journals; open access; removal of copyright; welfare effects;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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