Direct publishing and the bargaining between the author and the publisher

Abstract

An Author may directly publish some of his output for free use to increase consumer awareness and thus his profits from performances. The Publisher receives only a share of the profits of the remaining copyright work. We analyze the Author's actions and their effect on the bargaining between the Author and the Publisher. The Publisher voluntarily gives in the bargaining. She accommodates direct publishing so that its level maximizes his profit or she deters direct publishing. The Publisher's profit may be increasing in the distribution cost, due to the threat of direct publishing. Compared to bargaining, joint decision-making, a “360 deal”, reduces the appearance and volume of direct publishing and yields higher surplus. A high level of welfare arises if parties jointly publish directly all output.