Optimal Pricing and Quality of Academic Journals and the Ambiguous Welfare Effects of Forced Open Access: A Two-sided Model

We analyse optimal pricing and quality of a monopolistic journal and the optimality of open access in a two-sided model. The predominant aspect of the model that determines the quality levels at which open access is optimal is the nature of the (non-linear) externalities between readers and authors in a journal. We show that there exist scenarios in which open access is a feature of high-quality journals. Besides, we …nd that the removal of copyright (and thus forced open access) will likely increase both readership and authorship, will decrease journal pro…ts, and may increase social welfare. JEL Codes: L11, L82, O34 Keywords: Two-sided markets, academic journals, open access, removal of copyright, welfare e¤ects This research bene…tted from a Tilburg Law and Economics Center (TILEC) "Innovation, Intellectual Property and Competition Policy Grant". The authors are most grateful for this …nancial aid. We thank Ted Bergstrom, Mark McCabe, Ivan Png, Chris Snyder, Christian Zimmermann and participants of the NBER Workshop on Scholarly Communication, Open Science and Its Impact and the Tilburg Innovation, Intellectual Property and Competition Policy Conference for their valuable comments. We also thank participants of the Conference on Academia & Publishing in Torino and the Third Workshop for Junior Researchers on the Law & Economics of Intellectual Property and Competition Law as well as seminar participants in Barcelona, Christchurch and Madrid for helpful comments and suggestions. Optimal Pricing and Quality of Academic Journals and the Ambiguous Welfare E¤ects of Forced Open Access: A Two-sided Model