Bryan D Caplan 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.
A great many journals are owned by for-profit entities. And "subsidies" do not undermine the survivorship analysis - "subsidies" are just another name for a customer revenue stream that profit-maximizing entities would also take into account. >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. The topic was referee vetoes versus strong editors. There have long been journals with strong editors, and I don't see much social pressure against people who like such journals. There might be other coordination failures with people liking the AER, but if so they must be about some other fixed feature of the AER besides referee vetoes. 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
