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

41 Pages Posted: 14 Jul 2006 Last revised: 22 Apr 2016

Mark J. McCabe

Boston University - Questrom School of Business; SKEMA Business School Sophia Antipolis Nice

Christopher M. Snyder

Dartmouth College - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 12, 2016

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.

Keywords: open access, scholarly journal, two-sided market, competition

JEL Classification: L14, L82, D40, L31

Suggested Citation

McCabe, Mark J. and Snyder, Christopher M., Open Access as a Crude Solution to a Hold-up Problem in the Two-Sided Market for Academic Journals (April 12, 2016). Available at SSRN: https://ssrn.com/abstract=914525 or http://dx.doi.org/10.2139/ssrn.914525

Mark McCabe

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

HOME PAGE: http://sites.google.com/site/markjmccabe1/home

SKEMA Business School Sophia Antipolis Nice ( email )

60 rue Dostoïevski
SKEMA Business School, Economics Department
Sophia Antipolis, 06902
France

HOME PAGE: http://sites.google.com/site/markjmccabe1/home

Christopher Snyder (Contact Author)

Dartmouth College - Department of Economics ( email )

301 Rockefeller Hall
Hanover, NH 03755
United States
(603) 646-0642 (Phone)
(603) 646-2122 (Fax)

HOME PAGE: http://www.dartmouth.edu/~csnyder/

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