evaluating big deal journal bundles - ucsb economics.pdfVIP

Evaluating big deal journal bundles a,1 b c d Theodore C. Bergstrom , Paul N. Courant , R. Preston McAfee , and Michael A. Williams aEconomics Department, University of California, Santa Barbara, CA 93105; bGerald Ford School of Public Policy, Economics Department, and School of Information, University of Michigan, Ann Arbor, MI 48109; cStrategic Technologies, Google, Mountain View, CA 94043; and dCompetition Economics LLC, Emeryville, CA 94608 Edited by Jose A. Scheinkman, Columbia University, New York, NY, and approved May 21, 2014 (received for review February 19, 2014) Large commercial publishers sell bundled online subscriptions to price to all academic libraries. Because of high demand for some their entire list of academic journals at prices significantly lower journals, large research universities often bought multiple sub- than the sum of their á la carte prices. Bundle prices differ drasti- scriptions and maintained separate collections in specialty- cally between institutions, but they are not publicly posted. The based libraries. data that we have collected enable us to compare the bundle In the late 1990s, as online editions of journals became widely prices charged by commercial publishers with those of nonprofit available, business models changed drastically. With online edi- societies and to examine the types of price discrimination prac- tions, there are no printing or mailing costs, and the marginal ticed by commercial and nonprofit journal publishers. This infor- cost to the publisher of permitting another user is essentially mation is of interest to economists who study monopolist pricing, zero. Moreover