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Open Access as a Crude Solution to a Hold-up Problem in the Two-Sided Market for Academic Journals

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  • Mark J. McCabe
  • Christopher M. Snyder

Abstract

The move from traditional to open-access journals—which charge no subscription fees, only submission fees—is gaining support in academia. We analyze a two-sided-market model in which journals cannot commit to subscription fees when authors (who prefer low subscription fees because this boosts readership) make submission decisions. This leads to a hold-up problem, manifested as excessive subscription fees. Open access is a crude attempt to avoid hold up by eliminating subscription fees. We compare the efficiency and profitability of traditional versus open access under various market structures (monopoly, Bertrand competition) and extensions (non-profit journals, bundling, hybrid pricing), using our theoretical findings to understand the evolution of the market for academic journals in the Internet age.

Suggested Citation

  • Mark J. McCabe & Christopher M. Snyder, 2016. "Open Access as a Crude Solution to a Hold-up Problem in the Two-Sided Market for Academic Journals," NBER Working Papers 22220, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22220
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    References listed on IDEAS

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    1. Attila Ambrus & Rossella Argenziano, 2009. "Asymmetric Networks in Two-Sided Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 1(1), pages 17-52, February.
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    4. Gaulé, Patrick & Maystre, Nicolas, 2011. "Getting cited: Does open access help?," Research Policy, Elsevier, vol. 40(10), pages 1332-1338.
      • Patrick Gaulé & Nicolas Maystre, 2008. "Getting cited: does open access help?," CEMI Working Papers cemi-workingpaper-2008-00, Ecole Polytechnique Fédérale de Lausanne, Collège du Management de la Technologie, Management of Technology and Entrepreneurship Institute, Chaire en Economie et Management de l'Innovation.
    5. Jay Pil Choi & Byung‐Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471, September.
    6. Hanna Halaburda & Yaron Yehezkel, 2013. "Platform Competition under Asymmetric Information," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 22-68, August.
    7. Yassine Gargouri & Chawki Hajjem & Vincent Larivière & Yves Gingras & Les Carr & Tim Brody & Stevan Harnad, 2010. "Self-Selected or Mandated, Open Access Increases Citation Impact for Higher Quality Research," PLOS ONE, Public Library of Science, vol. 5(10), pages 1-12, October.
    8. Peder Olesen Larsen & Markus Ins, 2010. "The rate of growth in scientific publication and the decline in coverage provided by Science Citation Index," Scientometrics, Springer;Akadémiai Kiadó, vol. 84(3), pages 575-603, September.
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    Cited by:

    1. Oliver Budzinski & Thomas Grebel & Jens Wolling & Xijie Zhang, 2020. "Drivers of article processing charges in open access," Scientometrics, Springer;Akadémiai Kiadó, vol. 124(3), pages 2185-2206, September.
    2. Lisa Matthias & Najko Jahn & Mikael Laakso, 2019. "The Two-Way Street of Open Access Journal Publishing: Flip It and Reverse It," Publications, MDPI, Open Access Journal, vol. 7(2), pages 1-29, April.
    3. Wang, Shiying & Chen, Huimiao & Wu, Desheng, 2019. "Regulating platform competition in two-sided markets under the O2O era," International Journal of Production Economics, Elsevier, vol. 215(C), pages 131-143.
    4. Philipp Kohlgruber & Christoph Kuzmics, 2017. "The distribution of article quality and inefficiencies in the market for scientific journals," Graz Economics Papers 2017-11, University of Graz, Department of Economics.
    5. Oliver Budzinski & Thomas Grebel & Jens Wolling & Xijie Zhang, 0. "Drivers of article processing charges in open access," Scientometrics, Springer;Akadémiai Kiadó, vol. 0, pages 1-22.
    6. Carmen López-Vergara & Pilar Flores Asenjo & Alfonso Rosa-García, 2020. "Incentives to Open Access: Perspectives of Health Science Researchers," Publications, MDPI, Open Access Journal, vol. 8(2), pages 1-17, May.
    7. Mueller-Langer, Frank & Scheufen, Marc & Waelbroeck, Patrick, 2020. "Does online access promote research in developing countries? Empirical evidence from article-level data," Research Policy, Elsevier, vol. 49(2).

    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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