Robin Hanson wrote: > Here we have an industry (academic journals) where concentration > is low, entry is cheap, and most firms use the same production > technology (referees with veto power), even though an alternate > technology (editors pick) has long been tried, and is easy to try. > Frey claims that it is a market failure not to use this alternate > tech, because the standard tech has agency costs, which has the > effect of raising the costs to one of the inputs (authors).
I must have raised this issue before, but aren't you leaving out a key competitive assumption, namely profit maximization? If you have a ton of firms but their motive is not financial success, most of the standard results don't go through. You might appeal to survivorship (with randomly assigned objective functions, profit maximizers gradually take over), but if non-profits have a continual stream of subsidies that does not have to work. > If this were any other industry, I'm sure Frey would be among > the first to make the standard economist's response: If your > preferred tech is easy, has long been tried, and has lower costs > without other disadvantages, in a competitive industry why > hasn't it long displaced the standard tech? I'm sure a clever > person could come up with an externality or asymmetric information > market failure argument, but the amazing thing is that Frey > doesn't even try here. How about simple coordination failure? The AER is focally viewed as the top econ journal. If one person says the AER sucks and ignores it he mostly hurts his own prospects. A lot of people would have to coordinate on an alternative at once for this to change. > I'd say that the key stumbling block to a better theory of academic > journals is identifying the real customers and their preferences. > > Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu > Asst. Prof. Economics, George Mason University > MSN 1D3, Carow Hall, Fairfax VA 22030-4444 > 703-993-2326 FAX: 703-993-2323 -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] "He lives in deadly terror of agreeing; 'Twould make him seem an ordinary being. Indeed, he's so in love with contradiction, He'll turn against his most profound conviction And with a furious eloquence deplore it, If only someone else is speaking for it." Moliere, *The Misanthrope*
