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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


Sources:

The full conference speech can be found at:
http://people.cornell.edu/pages/pmd8/fair_pricing_speech.doc

and summarized in the D-Lib article:

Fair Publisher Pricing, Confidentiality Clauses and a Proposal to Even the Economic Playing Field
D-Lib Magazine, v10 n2, Feb 2004
http://www.dlib.org/dlib/february04/davis/02davis.html