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An Economic Perspective on Academic Publication

April 4, 2012

By Ittai Abraham and Moshe Babaioff

Can we use Economic insights to better understand the ecosystem of Academic Publication? In light of recent changes, how can we optimize this ecosystem? After all, this is a system with many participants with different interests: authors, publishers, academic institutions, consumers (of academic publications) which can all be modeled as rational agents. The classic microeconomic approach to solving such a problem is to design a mechanism that achieves some “good” outcome under rational behavior. But before starting to optimize the mechanism there is a need to decide which quantity we want to optimize.

There are two classical goals in mechanism design, one is to optimize a social welfare function and the other is to optimize the revenue of the mechanism designer (or one of the agents). There are of course many other potential goals, like notions of fairness or combinations of several simple goals. The main point is that before trying to optimize, one should set a clear goal: what are we optimizing?

Lance suggests that academic publications are of little value to the author but publishers can extract considerable value from them. A microeconomic perspective would provide a more nuanced analysis. Author’s value is generated by the impact of his work. Indeed many academics are measured by their long term impact and are compensated accordingly. If academic work is more accessible then it may reach more people (consumers) that can benefit from it and this in turn can increase the social welfare generated from the academic work and therefore the value the author derives from the paper. Another natural question is how to distribute the social welfare that is created between the various agents (author, publisher, consumers) following the generation of academic work.  Currently all the revenue that is extracted from consumers goes to the publishers, but one can also envision a world in which some of it goes to the authors, similar to the way musicians are paid when songs are downloaded from iTunes. Lance also says that it seems to be “shame to leave the monetary value of our papers on the table”. A microeconomic re-formulation of this “shame” is that academic papers create value (social welfare) and perhaps some of this value should be extracted as revenue (to be given to the publisher, author or split between them). In the extreme, one might try to build a mechanism to generate as much revenue as possible. Microeconomic theory suggests guidelines for designing such mechanisms.

But there is a much deeper and more fundamental question to be asked. Is the goal of maximizing the revenue the correct goal? We argue that the right optimization goal should be the social welfare. After all, many of the researchers that are producing these papers are actually paid by the state or by a public institution (and implicitly by tax-payers) and one could argue that the goal of this money is to increase social welfare by spending it on basic research that will be disseminated back to the public (and not to increase the revenue of publishers or authors).

If you believe that mechanisms for academic publications should optimize social welfare then it seems that posting your work on an on-line publicly accessible (and durable) service like the arXiv produces considerably more social welfare than placing it (only) behind pay-walls. Services like the arXiv cost money to maintain. But the technologies that they use allow to significantly reduce the cost of disseminating information. We believe that this is a major disruption of the academic publishing industry. In particular, publishers (like the ACM) should try to embrace this change by exploring new models to provide valuable services for academic publication (while making fair profit).

One may argue that in the current system some of the revenue generated from the various paywalls is channelled back to research (for example via discounts to other events). Indeed, without a paywall, we will need to find alternative (perhpas more direct) ways to fund these research activites.

To conclude, from a microeconomic perspective, if the goal is to maximize social welfare then using on-line low-cost publishing platforms that enable free access can dramatically increase the social welfare induced by our papers and research contributions.

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