RE: Response from Ted Bergstrom to Ann Okerson

["John McDonald" <jmcdonald@library.caltech.edu>]

Karl,

Most state institutions can not sign nondisclosure agreements.

The simple act of sharing pricing information is not restraint of trade or
collusion.  That's all that either Phil Davis or Bergstrom/McAfee have
called for here - not an agreement among institutions to not buy unless
certain pricing demands are met.

John McDonald
Acquisitions Librarian
California Institute of Technology

-----Original Message-----
[mailto:owner-liblicense-l@lists.yale.edu] On Behalf Of Karl Bridges
Sent: Wednesday, November 09, 2005 3:24 PM
To: liblicense-l@lists.yale.edu
Subject: Re: Response from Ted Bergstrom to Ann Okerson

My question is whether this is legal.  First, many libraries do have
nondisclosure agreements that would prevent them from doing this.  
Second, isn't this something like restraint of trade?  A group of
businesses (libraries) getting together to collude to decide what prices
they will accept-- with the idea obviously of lowering prices.  
Personally, I'd hesitate to participate in such an arrangement unless my
university counsel told me that I wouldn't be running afoul of laws about
interfering with interstate trade.

Phil Davis wrote:

> In response to Ann Okerson's comment that many libraries do not pay 
> the list price for journal access, Ted Bergstrom responds:
>
> ..."It would be very useful for libraries to collect consortium price
> data in a central database, to help libraries understand the negotiating
> environment.  This would require universities to show some backbone in
> refusing to sign secret agreements with publishers"...
>
> This is very interesting, since I proposed such a solution last year at
> the 2004 Charleston Conference on Collection Development.  While I
> received strong vocal support from the library community, few (if any)
> were actually willing to adopt this solution.  Economists will tell you
> that market transparency increases competition and leads to lower
> prices, yet it is based on the assumption that individuals are acting in
> a collectively rational way.  Individuals in our society are generally
> unwilling to openly share their salary with others and what they paid
> for their home, in spite of the fact that such openness would lead to a
> fairer market.  [as an aside, I've always wondered what would happen if
> I stood up at the front of a plane and openly disclosed what I paid for
> my ticket.  Would the Department of Homeland Security remove me from the
> flight in handcuffs for inciting a riot?]
>
> In the same way, librarians are reluctant to share pricing information
> (and willfully accept confidentiality clauses) if they believe if they
> are getting a "good deal" from the publishers.  They are also reluctant
> to share pricing information if they believe they got a bad deal (who
> would admit they are a poor negotiator?).
>
> While I completely agree with Ted Bergstrom that such a public database
> of pricing information would be useful, I was convinced that it won't be
> adopted for the simple reason that human behavior in this case does not
> lead to collective rational behavior.  If anyone can get such a system
> off the ground, I'd love to be proven wrong.
>
> --Phil Davis