The economist Preston McAfee is trying to do some good

I first met Preston McAfee in Barcelona about 10 years ago. I was giving my paper on Lojack, which I had given way too many times because it was the paper I used on the job market. I had stopped getting new and interesting comments from the audience at least 5 seminars earlier. But in Barcelona, the next-to-last time I ever gave the paper, some guy in the corner of the room made two or three brilliant comments I had never heard before and greatly improved the paper. It turned out to be Preston McAfee. So now, whenever he does something, I try to pay attention.

Preston is on a mission. He wants academic output to be cheap. And he is trying to do something about it.

For starters, he has written an open-source economics textbook that he is giving away for free.

When he told me about this, I wrote back that he was nuts. To my mind, it makes sense to give away scholarly research to economics journals because we as academics get rewarded in other ways for those sorts of contributions to knowledge. But, nobody gets much academic credit for writing textbooks; people mostly do it to make money. It is an incredible amount of work to write a textbook. I do like the book, though. And you can’t beat the price.

His latest endeavor (with Theodore Bergstrom) is fighting the high prices of academic journals. Their web page devoted to this is here. I edit a journal called the Journal of Political Economy. If you check out that journal at McAfee’s website, you will see that it is very cheap. As McAfee notes, one reason journals can be cheap is that they pay editors very little (in my case nothing at all).

McAfee and Bergstrom have also posted an open letter as well as some statistics. For-profit journals charge a lot more than not-for-profit ones, which is different than with hospitals.


The Crooked Links

An economist trying to do some good

Preston McAfee is on a mission. He wants academic output to be cheap. And he is trying to do something about it. For starters, he's written an open-source economics textbook. [see also]...

Changing Way » Blog Archive » Open Source Econ Text

[...] I saw links to McAfee’s book at several blogs, including Freakonomics. [...]

jkrowas

McAfee's book serves an important purpose at Caltech, where everyone has to take either introductory economics or introductory political science (i.e., game theory with Ordeshook). Since most principles books don't use calculus, and every Caltech freshman knows calculus, there's a cognitive disconnect, using lots of words where a simple derivative would do. Using calculus in an introductory book suits Techers just fine. I love the part where he says "marginal is just economists' jargon for 'deriviative of'". Most economics textbooks say something like "'derviative of' is just mathemeticians' jargon for 'marginal'".

StCheryl

Preston McAfee is an original thinker -- he wrote a hilarious sendup of economics and economic history in a 1983 American Economic Review paper called "Economic Growth and the Voyage of Columbus." It was an attempt to quantify what America would have been like in the event that Columbus had not landed there. Even the footnotes are funny. If he never did anything else, that was an important contribution to the economics literature.

StCheryl

Did anyone else notice that Oliver Smoot, for whom the Smoot bridge between Boston and Cambridge, and that unit of measure, retired from the National Academy of Standards? The link tells the story of how the bridge and measure got their name.

http://www.washingtonpost.com/wp-dyn/content/article/2005/12/07/AR2005120702328.html

John S.

While I am not unsympathetic to their cause, the following line from McAfee and Bergstrom's open letter caused a chuckle:

"The prices set by profit-maximizing publishers are determined not by costs, but by what the market will bear."

Call the Nobel committee, I believe these two are on to something!

Dr. Funk

With regard to the open letter, I'm confused as to why publishers are able to price at the monopoly level. Don't journals compete against each another, with each one trying to lure the top academics in their field? Wouldn't McAfee and Bergstrom be wise to shut their mouths and start up journals that outbid their competition for the best content? I fail to see why a boycott is necessary.

petersuber

Preston McAfee is doing wonderful work and he's not alone. For more on open access to science and scholarship, see the Open Access News blog [ http://www.earlham.edu/~peters/fos/fosblog.html ] or Open Access Overview [ http://www.earlham.edu/~peters/fos/overview.htm ].

prestonmcafee

Dr. Funk describes exactly the the BE Press strategy -- start a for-profit journal for your own piece of the action.

As to why university level action is necessary, Ted Bergstrom has a very entertaining parable concerning the anarchists' convention on his journal page

http://www.econ.ucsb.edu/%7Etedb/Journals/jpricing.html

The simple point is that journal quality is, foremost, a result of coordination: we want to publish in the JPE, the AER, or Econometrica because it is a signal of quality, and it is a signal of quality because other good papers are published there. Note that, in such a situation, a very high library price indeed could be sustained for journals based on the quality of the articles. The publisher is supplying very little; the main inputs are article quality and refereeing, both of which are usually freely given. Injecting pricing of inputs, at least when the journal charges a lot, is a way to induce bidding by journals. This isn't a boycott, but a call for pricing valuable resources.

Finally, on John S.'s remark, our letter was intended for university presidents, provosts and librarians. Most librarians seem to believe that if we reason with the for-profit publishers, they will lower their prices to reasonable levels. They persist with this belief in spite of decades of contrary evidence. Perhaps because academic librarians are in the business of serving the academic community, living at the very pinnacle of the ivory tower, the implications of profit-maximizing behavior are foreign to them.

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Dr. Funk

Dr. McAfee I appreciate your taking the time to respond here. I read the bit about the anarchists' convention and I must admit I'm still a bit confused.

The basic argument seems to be that coordination leads to monopoly power. A certain entity--be it a hotel or a journal--gains critical mass and thus there's a barrier for new competitors to enter into the market.

What confuses me is that you name three journals (JPE, AER, Econometrica) that all have attained that critical mass. To parallel to the anarchists, suppose there's not one but three distinct conventions. Now it seems the prices should return to competitive levels.

I'm also slightly confused about the equilibrium you propose, in which academics continue to submit their work free of charge and journal prices drop. My intuition would be that journal prices remain constant while academics being to receive compensation for their work.

I understand that academics have a non-monetary incentive to publish, but when the demand for articles exceeds the supply (as evidenced by libraries' willingness to pay high prices for the journals) I'd think that academics have a right to greater compensation.

I'd appreciate any clarification on these points. I'm not used to economists using the term price gouging and preaching the virtues of non-profits.

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prestonmcafee

Having three conventions shouldn't get prices back to competitive levels unless the hotels have an ability to expand and accommodate all the anarchists. That would solve the problem of the conventions, and the AEA is debating launching a series of field journals on that same principle.

One could argue that the ideal market organization involves journals paying for the best papers. Law journals work somewhat along these lines -- one submits a paper simultaneously to all the relevant journals, and then publishes in the highest prestige journal that accepts the paper (no cash changes hands). Paying for inputs would have the virtue that the creators of the work are rewarded for their creations and in equilibrium the publishers should earn a normal rate of return on their costs. As a practical matter, however, journals are not usually paying for research, nor are they paying for refereeing and editing work. Academics do this work because it is prestigious or, in the case of referees, they are afraid of annoying editors. It is individually rational, but the problem is that this free labor then justifies a higher library subscription rate.

In that regard, the library price has a moral hazard aspect. Perhaps if departments could keep the subscription costs when libraries drop subscriptions, then there would be less of a problem with high journal prices. One way of viewing this problem is that if the library drops an over-priced economics journal from the library, it will likely wind up buying Mathematical Metaphysics, Recreational Pharmacology, or Modern Astrology, instead. Thus everyone lobbies to keep the journals in their own fields, and the users of the journals aren't the payers, at least at most universities.

It is an interesting question as to why journals that pay authors haven't come into existence. Large profits mostly arise from owning a historically valuable journal like JET or Cell, and new journals barely cover costs. So while it might be a long run profitable strategy to buy high quality papers in order be established as a high quality journal, it is a risky strategy. (Microsoft subsidized the writing of software that ran in MS-DOS, to help establish coordination on their operating system.) What would it take per paper to move papers from the AER or JPE into a new journal? I have seen estimates that a top journal publication increases income by $1,000 per year, say with a $20K increase in present value. If the journal publishes 100 articles per year, that is $2 million in added annual costs. Moreover, there is the uncertainty of when you can wean authors from the subsidized rates and whether the expectation that the journal is of high quality will survive that process.

Ted and I suggest the much simpler strategy of trying to identify which journals offer high value per dollar, recommending universities follow the sensible consumer strategy of buying the better value journals and avoiding the more expensive ones, and that in addition universities discourage their faculty from aiding the journals that charge libraries a lot, unless they are compensated for the time and costs.

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dkane

As an additional strategy, it might be useful for senior (tenured) economists like McAfee to start refusing to cite work that isn't freely available. (There would of course be some work that isn't available that they really want to cite, but earlier working paper versions are often available for citation.)

At the least, this would encourage professors to follow the process of people like Gary King.

http://gking.harvard.edu/vitae/node7.html

If every published article were available for free, then libraries would need nothing more than an internet connection and a printer.

There would be transition costs, of course, but many people are already, for laziness or other reasons, much more likely to read things that are on-line. Perhaps all that is required is a push in this direction.

prestonmcafee

I don't think I can refuse to cite relevant papers, no matter how odious the terms. But making research available on websites seems like a smart thing for the individual. Bergstrom thinks, based on a test sample, that about a majority of economics papers are available without going to the library.

Most publishers deny authors the right to post the published version of papers on their personal website, but do permit pre-prints or penultimate versions. This is true both of for-profit and non-profit publishers. I haven't yet heard of any lawsuits, however.

dkane

Perhaps "refusing to cite" is not the best way for me to put this idea. An scholar can only fit X citations into a paper. There are many, many papers worth citing that are freely available. Many freely available papers make very similar points (and would serve potential readers equally well) as unavailable papers.

Take your latest paper. Replace all the unavailable citations by available ones. How much is the quality of the paper lowered? Not much, I'd guess. Moreover, your readers are probably well-served since, on a per hour basis, it is much easier for them to investigate the cited papers in this better version.

So, I am not proposing a law or rule that says that you should refuse to cite unavailable papers. Rather, I am suggesting that the world would be a much better place if it just so happened that 99% of your citations were to freely available papers.

If you and others do so, it will be a lot easier for me to suggest appropriate action on the part of university librarians.

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Open-Source-Jahrbuch-Blog

Ein Lehrbuch für lau

Unter www.introecon.com/ hat der Ö konom R. Preston McAfee vom California Institute of
Technology ein Ö konomie-Lehrbuch ver ö ffentlicht - unter einer Creative Commons
by-nc-sa-Lizenz.

Open-Source-Jahrbuch-Blog

Ein Lehrbuch für lau

Unter www.introecon.com/ hat der Ö konom R. Preston McAfee vom California Institute of
Technology ein Ö konomie-Lehrbuch ver ö ffentlicht - unter einer Creative Commons
by-nc-sa-Lizenz. Als Kampfansage gegen ü berteuerte und schwachsinnige Lehrb ü...

prestonmcafee

This didn't translate with standard tools, so I found the site,

http://www.opensourcejahrbuch.de/blog/

which seems to have the original, and it translated to:

Under www.introecon.com/the economist R. Preston McAfee of the California institutes OF Technology published an economics text book - under a Creative Commons by-numerical control-SA-license. As challenge against made too expensive and weak-intimate text books.

"Ein Lehrbuch für lau" translates to "A text for lau." Anyone know what lau is?

Open Source Microeconomics Textbook at philcrissman.com

[...] Link courtesy of the Freakonomics blog. // Used for showing and hiding user information in the comment form function ShowUtils() { document.getElementById("authorinfo").style.display = ""; document.getElementById("showinfo").style.display = "none"; document.getElementById("hideinfo").style.display = ""; } function HideUtils() { document.getElementById("authorinfo").style.display = "none"; document.getElementById("showinfo").style.display = ""; document.getElementById("hideinfo").style.display = "none"; } [...]

The Crooked Links

An economist trying to do some good

Preston McAfee is on a mission. He wants academic output to be cheap. And he is trying to do something about it. For starters, he's written an open-source economics textbook. [see also]...

Changing Way » Blog Archive » Open Source Econ Text

[...] I saw links to McAfee’s book at several blogs, including Freakonomics. [...]