I have taken the liberty of changing the subject line since the discussion seems to have shifted. Given that this is the Armchair list, what would economists make of an industry that works like this: A firm (the university) hires employees (professors) to make products (articles) that are then given gratis to other firms (journal publishers) who produce a product (a journal) that is then sold back to a part of the original firm (the university library) who buys it on behalf of other parties (its faculty) who by and large will not spend their own money on the product (and do so only when there is severe price discrimination in their favor). Academic books fit the same model except the product is sold to the publisher but the proceeds go to the employee and not the firm that originally invested in the writing of the book. Steve Landesberg recently remarked to me in relation to his experience with university administration that it's clear universities are maximizing something, but it's not clear what. Perhaps by publishing journals, universities maximize the quality of students who seek admission. John Samples Cato
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