Social and Behavioral Sciences Commons^™

Librarians And The Terrible Fix: Economics Of The Big Deal, Ted C. Bergstrom

Ted C Bergstrom

The academic journal market is characterized by delegated purchasing, unreliable signals of demand, and a complex, difficult-to-evaluate product. As a result, the demand for journals is highly inelastic to prices. Large commercial publishers have capitalized on this inelastic demand, by reducing competition through mergers and consolidations, by offering Big Deal bundled contracts, and raising their prices to levels far above average cost. We suggest that the demand for access to journal articles would be much more price elastic and the overall cost to the academic community would be lower if universities were to abstain from purchasing bundled site licenses at …