Authors have the power, let them use it: rebuttal to David Shulenburger


In July 2016, the Association of Research Libraries (ARL) published an article it requested from David Shulenburger, an economist and senior fellow at the Association of Public and Land-grant Universities (APLU).[1] In this article Dr. Shulenburger argues that flipping scholarly publishing of journal articles from a post-publication, subscription-based business model to a pre-publication, article-processing-charge model would make things worse: that is, lead to higher, not lower payments to publishers (and higher resulting profits for them).

Dr. Shulenberger recommends the right approach to the question — examining supply and demand conditions after a flip. However, he makes a fundamental error in his analysis, and as a result, reaches the wrong conclusion.  Following standard economic logic (as he recommends) leads to the opposite conclusion: a flip to an APC-based system would most likely lower the payments to publishers.

The right question to ask: we agree

Let me start with what Dr. Shulenberger got right: the basic economic logic one should apply.  He states, correctly, that “in the long run [the prices (APCs) paid] are based in the supply/demand factors of the scholarly communications market.”

But then he applies this principle incorrectly, overlooking the critical factor in the publishing market.  He states “individual faculty members have no market power with journal publishers”, and thus concludes that since shifting payment from subscriptions to APCs moves decision making to authors, the result is that the publications suppliers (publishers) will have more relative market power in the APC world, and will thus be able to charge even higher prices than they do today.[2] But he is wrong: authors hold the fundamental power in this market, and the precise problem with the subscription model is that authors are excluded from the market.[3]

Authors have the power

Surprisingly, Dr. Shulenburger starts his article by making precisely this point: “the root of the sellers’ market power has been the granting by authors of all ownership and distribution rights to their work to the journals owned by the sellers.”  Publishers are not the original suppliers of scholarly content: they are intermediaries standing between authors and libraries.  The authors own the original content. Until the publishers obtain copyright from the authors, publishers have no market power.

Recognizing that authors do have tremendous — one could say ultimate — power in the publishing market, how does this affect the economic analysis of a world flipped to an APC-based pre-payment model for financing publisher activities?

Dr. Shulenburger states that in such a world, the “incidence” of APC cost falls on authors, whether they are reimbursed (by the library or another part of the institution) or not.  He’s not quite right about that either, but that’s okay, let’s suppose he is: let’s suppose authors bear the full cost of APCs.  Then how does the economic transaction look?  Here is where Dr. Shulenburger makes his fundamental error: he says individual authors have no market power to negotiate lower APCs with a journal.  But that is not how markets work: the individual author doesn’t need to negotiate APCs with a journal any more than you or I need to negotiate the price of a large flat-screen HDTV with Samsung.  If Samsung charges an above-competitive price, we’ll buy from Panasonic or LG or Sony, etc.

Likewise the scholar: if a potential publisher charges a high APC, the author can submit her paper to another journal with a lower APC.  With all authors making such decisions every day, publishers will need — in a way never before seen — to start competing with each other on price.  And it is precisely that competition that will lead to lower prices in an APC world than in a subscription world.

In short, Dr. Shulenburger is wrong about concluding that authors have little or no power in the market, because he forgets his own fundamental — and incontrovertible — point that the power publishers have comes from authors.  And once authors have skin in the game — pay (some or all) of APCs — they will have a reason to start exercising that, not through complicated negotiations, but by simply shopping their article submissions around.

Dr. Shulenburger does know that this point is out there, but he brushes it aside with a common fallacy: that there is one “best” journal for every article submission, and so much hinges on getting one’s article into that “best” journal that authors would never consider submitting to another journal based on APC price.

Malarkey.  We scholars (I have been publishing my economics articles in journals since 1988) almost never consider only a single journal as a possible outlet for an article.  Depending on its subject, quality, and other considerations, there almost always will be at least two, maybe three or more journals that are in a rough equivalence class as far as prestige and impact on our tenure, promotion and fame. Yes, of course some are more prestigious than others…but there is almost never a single best journal.  And we make spending decisions about how to best advance our research based on cost all the time: with our scarce research funds we decide whether to buy the most expensive new lab instrument, or perhaps hire another research assistant; we decide whether to run 10 or 15 subjects through the fMRI machine (which charges us thousands of dollars per hour); we decide which and how many conferences to attend in part based on cost.

And it is not necessary that every scholar choose every journal submission based on APC (and certainly not on APC alone).  As long as many submission decisions are affected, in part, by the opportunity to save some research funds (say, to spend on running a few more experiments) if we submit to a lower APC — but comparable quality — journal, publishers will compete.  Because without our articles, they have nothing.  No power. Nothing.

In an APC world we don’t lose the market / bargaining power of libraries (such as it is)

There is a subsidiary point that Dr. Shulenburger gets wrong to which I alluded above: that only authors will be involved in the economic transaction with publishers, and not libraries (thereby losing the leverage of whatever limited market power we libraries have).  There are many different ways that funds to pay APCs could be routed to author research budgets (e.g., direct payments from granting agencies, subsidies from library budgets no longer spent on subscriptions, etc. — a topic for another day).  But let’s suppose, as Dr. Shulenburger does, that they may, at least in some institutions, be funded by libraries (who no longer need to pay subscription fees).  The library has a finite budget, so it might well establish a maximum APC reimbursement — say, $3000 per article for a certain category of journals — leaving authors to find additional funds if they want to submit to a higher-APC journal.  But then the library is back in the negotiation game, and can exert the same power that it exerts in the subscription world: the publishers will want to negotiate  with libraries on how high an APC it will reimburse for their journals.  Bringing authors into the economic bargain — which is absolutely essential for undercutting publisher market power, since the publisher’s market power comes from the authors — does not need to eliminate the bargaining power of libraries.

Dr. Shulenburger dismisses this argument by saying that authors will demand that libraries (or whomever) pay whatever APC their preferred journal sets, no matter how high, and libraries won’t be able to resist this.  Malarkey, again.  Authors demand all kinds of additional expenditures by their universities and libraries, and they simply don’t get everything they ask for.  Universities don’t pay whatever salary faculty request, nor do they provide whatever research funds faculty request, and they certainly don’t provide libraries with budgets sufficient to buy all of the books and journals that faculty want.  So, if a significant share of total payments to publishers (in the form of APC reimbursements) flow through libraries, and the budget is limited (do any university librarians have a “sky is the limit” budget for payments to journals?), then libraries have substantial bargaining power too.

But again, this point is secondary: the far more important flaw Dr. Shulenburger makes is that bringing authors into the market increases the publishers’ relative market power.


After acknowledging that authors control “the root of the sellers’ market power”, Dr. Shulenburger ignores how this affects the forces of supply and demand that he agrees matter for the outcome in a flipped, APC payment world.  Giving authors some of the economic responsibility for deciding to whom to grant their copyrights is exactly the best (and perhaps only realistic) way to reduce publishers’ market power, and will result in lower payments to publishers.


1. I currently serve as the University Librarian at UC Berkeley.  I am also a Professor of Economics, and a Professor of Information (with tenure) at Berkeley.  For 29 years (until 2015) I was an economics professor at the University of Michigan.

2. Obviously, subscription “prices” and APC “prices” are different things, but I agree with Dr. Shulenburger that the comparison is the relevant one: what we care about is the total payments from universities (and other research institutions) to publishers.  “Prices” is just a convenient stand-in for this discussion, and does not change the analysis, for either of us.

3. I explain this in more detail, and several related points, in an article I released in April 2016, “Economic thoughts about ‘gold’ open access”.


5 thoughts on “Authors have the power, let them use it: rebuttal to David Shulenburger

  1. Caltech is mentioned in the Open Letter as an institution where “library journal budgets alone would not be enough to cover article processing charges.” While I think it’s important to note that the current allocation of library budgets systemwide reflects the reader-pays access model and would necessarily, and fairly naturally, change when dissemination costs were linked to the funding of the research itself, I could still imagine converting the current Caltech library budget to APCs. Using the Pay It Forward methodology, I estimate Caltech’s break-even APC to be ~$2000 using only library funds. That figure is reasonable or even high over time, given the “effective brake on publishers’ price increases” that the Pay It Forward study notes would come with author price sensitivity (which is quoted in the Open Letter). If grant and discretionary funds were taken into account, funds already being used for OA and hybrid journal APCs as well as page charges in toll journals, I have full confidence in the affordability of a largely APC-based model– even at a research-intensive institution that does not have an ARL-level collections budget. It would be a shame if research libraries stand in the way of increased cost and price transparency in this market, openness of scholarship for all, and replicability of research, because of concerns over “time and resources to coordinate and execute” and the loss of a significant portion of “their” budgets.

  2. “And it is not necessary that every scholar choose every journal submission based on APC (and certainly not on APC alone). As long as many submission decisions are affected, …journal, publishers will compete.” Yes. We’ve already seen the dynamic where researchers who have already established their reputations and careers can lead the way to shifting what publishing options exist for everyone over time.

  3. How will gold OA memberships affect all of this? We’re trying to resist substituting subscriptions with institutional memberships to gold OA publishers for free or reduced APC for our authors. If the publishers that offer this kind of deal get a foothold, will that change the outcome?

    1. I don’t think it changes the basic point, Robin: the publishers’ market power won’t *increase*. It may be that we don’t have any more leverage over them if we swap subscriptions for institutional APC memberships wholesale, but we won’t have any less. And it’s hard for me to imagine a world in which all payments are by membership. Even if we subsidize APCs substantially, as long as there is some non-trivial economic cost to choosing one journal over another for submission, there will be a reason for authors to pressure publishers to lower the APC price, and it is that pressure — by the people who have the source of power, the intellectual property — that will reduce publisher market power and lead to (at least somewhat) lower prices.

  4. As it happens, there is a market place for OA publishing: Quality Open Access Market – QOAM. Today the number of fully scored journals (1000+ based on 5000 Base score cards coming from libraries in combination with 2800 Valuation Score Cards from authors) is too little to make an attractive market place for authors. Libraries could use QOAM as an instrument to facilitate authors to exert their economic responsibility and make publishers competitive.

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