Academic Libraries and the Economics of Scholarly Publishing in the Twenty-First Century: Portfolio Theory, Product Differentiation, Economic Rent, Perfect Price Discrimination, and the Cost of Prestige

Abstract

In the last five decades, a great deal has been written about the ‘serials crisis,’ library budget shortfalls, the growth of various commercial scholarly publishers, the response from various academic library associations to the serials crisis, and the emergence of open access publications. Yet very little has been written about the economics of scholarly publishing. In this article, the growth of universities and the academic community's never-ending need for prestigious scholarly publications are explored, along with substantive economic theories used by scholarly publishers, including portfolio theory, product differentiation, economic rent, and perfect price discrimination. A series of recommendations are made to ameliorate the ‘clash’ between academia and the scholarly publishing community.