RE: the Yale argument on open-choice

["Mcsean, Tony \(ELS\)" <T.Mcsean@elsevier.com>]

Eric adds some useful and interesting depth to Ann Okerson's 
posting. In particular I think his thoughts on the way OA pricing 
might be shaped by the demand curve relate to an under-explored 
area.  However Ann's core point is that Yale would pay more at 
any level of OA publication fee.  Even at a level which is 
currently accepted by the larger publishers, including PLoS and 
BMC, as financially unviable Yale ends up $1.4m (39%) worse off. 
It may be generally accepted that there would be winners and 
losers in an OA-dominated world, but even strong consensus needs 
the occasional draft of data to sustain it.

Tony McSean
Director of Library Relations
Elsevier
32 Jamestown Road
London NW1 7BY

+44 7795 960516
+44 20 7424 4242

-----Original Message-----
From: owner-liblicense-l@lists.yale.edu
[mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of Eric Hellman
Sent: 20 March 2007 00:05
To: liblicense-l@lists.yale.edu
Subject: the Yale argument on open-choice

This economic analysis makes a faulty assumption that article 
production is completely inelastic (in the supply-demand curve 
sense).

Lets first take the simplistic assumption that there would be 
only one price ($2500) to publish an article- how would the 
article producing community respond- why they would of course 
stop publishing least-publishable-unit articles, thus 
significantly reducing the cost to Yale.

In reality, there would emerge price competition among 
publishers- very prestigious journals would be able to charge 
much more than the less prestigious journals; Yale would end up 
spending more on the prestigious titles and probably less on the 
less prestigious titles.

The price competition would then engender technological 
competition in cost reduction. Different journals would chose 
different cost/quality trade-offs; the winning formula would be 
chosen by the market of authors seeking publication venues.

I'm not saying that the yale conclusion is necessarily incorrect, 
I'm just saying that what seems to be obvious, could possibly be 
false.

Eric Hellman, Director
OCLC Openly
Informatics Division
eric@openly.com
http://openly.oclc.org/1cate/      1 Click Access To Everything