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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Librarians And The Terrible Fix: Economics Of The Big Deal, Ted C. Bergstrom
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 …
Exclusivity, Competition And The Irrelevance Of Internal Investment, Catherine De Fontenay, Joshua Gans, Vivienne Groves
Exclusivity, Competition And The Irrelevance Of Internal Investment, Catherine De Fontenay, Joshua Gans, Vivienne Groves
Catherine de Fontenay
This paper considers the effect of exclusive contracts on investment decisions in a market with two upstream and two downstream firms. Segal and Whinston’s (2000) irrelevance result is generalized and it is shown that exclusive contracts have no effect on the equilibrium level of internal investment for the contracted parties when competition exists in both the upstream and downstream markets. Furthermore, by considering a more competitive environment we are able to demonstrate that strongly internal investment by rival upstream-downstream bargaining pairs is similarly unaffected by the presence of exclusive contracts.