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

32 Pages Posted: 26 Jul 2007

See all articles by Doh-Shin Jeon

Doh-Shin Jeon

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Jean-Charles Rochet

University of Toulouse Capitole - Toulouse School of Economics

Date Written: March 8, 2007

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.

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

JEL Classification: D42, L44, L82

Suggested Citation

Jeon, Doh-Shin and Rochet, Jean-Charles, The Pricing of Academic Journals: A Two-Sided Market Perspective (March 8, 2007). Available at SSRN: https://ssrn.com/abstract=1002910 or http://dx.doi.org/10.2139/ssrn.1002910

Doh-Shin Jeon (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 16 57 (Phone)
(34) 93 542 17 46 (Fax)

Jean-Charles Rochet

University of Toulouse Capitole - Toulouse School of Economics ( email )

Toulouse
France

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