Working Papers, Journals, and Libraries

The impact of the new technology of networking on journals is well explained by Kahin (1995):

In the networked environment, the pipeline model of publishing collapses. Authors can speak directly to readers. Publishers and libraries find themselves in the same business: providing access to information. Under the old model, publishers saw that books and journals were manufactured and physically delivered; libraries cataloged and archived books and journals from many publishers and made them available to one user at a time. In the new model, these classical functions, and the neat division of labor that characterized the pipeline model, disappear.

In the world of paper communication, libraries and publishers exist for very specific reasons. But, in a networked world, their reasons for existence may lesson or perhaps even disappear. A number of different economic models for electronic journals are presented by Grycz (1992). However, the most revolutionary is Harnad (1995). He presents a holistic view of how the entire journal industry may be upended with the introduction of networks for the benefit of academics (Odlyzko (1995)has a similar view). Harnad first makes the distinction between the ``trade'' and ``esoteric'' author. The former expects to be paid for his work; indeed, it may be his livelihood. The latter resides almost entirely in academia: the authors are not, and do not expect, to be paid for their words; the market per work is very small; and they sometimes even pay for their words to reach more readers (such as paying for and sending reprints). Their pay is tied to their recognition and status, which is gained from the words they write. They want those words to be as freely accessible as possible. Harnad is quite clear that his argument holds only for the esoteric author. He then puts the implications best when he says,

The first step in getting the word to one's peers, however, is to publish it at all, and in the Gutenberg age the only way to do this was through the mediation of the slow and expensive medium of printing and paper distribution. It was because of the high cost of this, the only means of making one's ideas and findings public at all, that esoteric authors have stood ready to go even farther than what has been mentioned so far: They have been willing to make the ``Faustian'' bargain of trading the copyright for their words in exchange for having them published. From the publishers' standpoint, the bargain was eminently fair: They asked for nothing more than they asked from trade authors, which was the right to protect the product from theft, so costs could be recovered and both author and publisher could make a fair profit. For the trade author, this bargain was not Faustian, because both he and his publisher stood to gain from it--and to lose from theft. But the need to pay a ticket at the door was the last thing an esoteric author would have wanted to impose by way of a deterrent for his already minuscule potential readership.

So for the esoteric author, there was always a conflict of interest built into the act of publishing: One wants to get the words out there to everyone who might be interested, but one agrees to erect a price-tag as a barrier, to cover the costs (not one's own, but those of the publisher) and a fair return (again not to oneself, but to the publisher who had incurred the costs).

Now that all this has been spelled out, the news: With the advent of electronic publication, the Faustian era for esoteric authors is now over. The reason is that the per-page cost--if one reckons it properly--is so much lower for purely electronic publication that it no longer makes sense to recover it on the subscriber model of trade publication.

He details journal's costs, where he speaks from experience--he edits both the paper journal Behavioral and Brain Sciences from Cambridge University Press and the electronic journal PSYCOLOQUY, sponsored by the American Psychological Association. There are two components to costs: distribution costs and ``first copy'' costs (all the costs up to distribution). Clearly, distribution costs for an electronic journal approach the trivial. He argues that the savings for first copy costs of a totally electronic journal over a paper journal are on the order of 70-90%.

With drastically lower first copy costs and virtually zero distribution costs (more accurately, very low costs borne by others), Harnad then goes on to argue that these much smaller costs should be borne by those who benefit from the research: the author's universities, funding bodies, societies, and libraries. In other words, such journals would be supported by a small page fee paid by these organizations. The works will then be freely accessible (not free, as the costs are covered by others, but freely available). Harnad thus provides a roadmap to Kahin's view consistent with academic values--the freest possible access to scholarly information. No longer will academics have to make trips to the library for journals they do not subscribe to, and Inter-Library Loan might even become extinct. Information becomes more ``free'' because of technological change.

The welfare and efficiency of Harnad's system is interesting. As pointed out by Ordover and Willig (1978), journals can be thought of as quasi-public goods because one can subscribe to one personally, or go to the library and read a shared one. In Harnad's system, journals become a pure public good (in distribution) with the cost of providing this good borne by those who benefit from it: the authors and their sponsors. Thus, in some sense, the optimal number of journals will be produced since those who benefit from the journals financially support the journals. Making journals a public good also has a nice symmetry with the knowledge they represent, which, as Arrow (1962) noted, is a public good. In addition, as pointed by Varian (1995), electronic journals, with what are thought to be substantial first copy costs and very low distribution costs, face decreasing average costs, thus making it difficult to recover costs if goods are priced at marginal cost. But, with Harnad's system, journals are priced at zero and the costs are borne by those who benefit from publication: the authors and their sponsors.

Also, as articles are produced by academics for reasons other than selling them, it is doubtful that an electronic world will produce more (or less) articles than the current hard copy system produces (however, the number of journals could rise or fall, but the overall quantity of output of economists is likely to relatively unaffected by this new technology). Electronic journals will and do exist, providing the refereeing, editorial (and selection) value added that they currently do in hard copy. Most of the value of a hard copy journal is the refereeing and editorial process and this does not change. What is different is that publishers as such are non-extant, and the distribution of the product--articles--becomes nearly free. Since the product is produced anyway, efficiency dictates that it be distributed freely with any costs borne by universities, societies, or libraries. If hard copy is desired, then the individual reader bears the printing cost which she should.

To a very large degree, Harnad's vision is reality in one field: high energy physics. In 1990, less than 100 high energy physicists started a list of electronic mail addresses and, via this list, sent their research papers around the world to each other. Paul Ginsparg, a physicist at Los Alamos National Laboratories and a very competent programmer, created what is now known as the ``E-Print Archives'', at Los Alamos of which hep-th (high-energy physics--theory) is the most successful. It was envisioned as, and is now, a fully automated preprint server. Submissions are made by authors, writing in TeX or, LaTeX. The software now automatically creates PostScript and Acrobat PDF files from these submissions. Readers access the system via the Internet by e-mail, ftp, and the web. Submissions are not only indexed (full body indexing as the submissions are made in TeX or LaTeX), but citation references are created so that each paper not only contains a list of references in the paper, but also a list of works cited by this paper. The paper thus has its own built-in citation index.

There are many reasons for this archive's success. It began with a core of researchers who used the archive; they all wrote using TeX; they were technologically adept at e-mail; the peer review process for high energy physics had broken so that journal publication was (and is) not the selection process as we know it in our profession; preprints were very costly to some institutions requiring budgets of $20,000; there was more international involvement, or at least collaboration, than we usually have; and research results were demanded on a timely basis (days rather than years).

One of the major fears about the E-Print Archive was that with no peer review or selection process, and given the experience on Usenet physics groups, the archive would be cluttered with noise rather than signal. This did not happen, and it appears that there is some self-selection process so that the noise has remained on Usenet while there is little on the archive.

Harnad favors peer-review; unlike some proponents of electronic journals, he feels it plays a useful role. After all, there is no fundamental reason why electronic journals cannot be peer-reviewed; at one level, it is simply a different means of distributing the articles which constitute a journal.

Clearly, the linchpin in Harnad's argument is the reduction in first copy costs with a totally electronic journal. Some find his arguments implausible (Scovill (1995), p. 15), but others, such as Odlyzko (in Okerson and O'Donnell (1995), p. 119), are convinced. This is now known as the 70-30 debate--are first copy costs reduced by 30% or 70%? The answer seems to lie in how much copy-editing is done by the journal. Some editors do no copy editing and other editors may rewrite a submission, investing days in the process. The current paper journals nourish a subsidization of poor copy submissions since papers must be reformatted and typeset before publication. Also, our profession has a very heterogenous set of styles among journals, and there is little reason to choose one over another. Hence, an author has little incentive (and none from the journal/publisher) to submit good copy or style. This is not true with electronic submissions, and in the future we may see journals reject articles which do not obey the journal's style. Springer-Verlag sometimes requires submission of LaTeX in a Springer style, and no copy-editing is done. Whatever the author submits is published. This lowers the copy-editing cost to zero. With electronic journals, the author who writes poor copy (regardless of the content) can be forced to bear the cost of his actions--either by a journal charge for copyediting of the particular article, or by rejecting the article for poor editing and style.

With an electronic journal, the distribution costs are virtually zero (these small costs are paid by those who pay for networks). With totally electronic submission, first copy costs would fall dramatically as illustrated by PSYCOLOQUY, the Electronic Journal of Combinatorics,, the Electronic Journal of Differential Equations, and Geometry and Topology. . Thus, with the remaining first copy costs supported either by institutions (a time honored tradition in academia by well-endowed departments), or with small page fees paid by authors or their sponsors, the journals will be freely available. All the journals mentioned earlier in this paragraph are freely available are based on this model.

The study by Jog (1995) of six academic journals shows that the typical journal costs $70,000 per year to produce. Typesetting (9%), printing (28%), and shipping (12%) account for almost 50% of the costs of the journal, which are print based expenses. Administration expense was 25%, while editorial expense was 23%. Both of these expenses may be reduced for electronic journals (possibly to $0 as it appears to have been with the EJC). Administration can be automated and handled electronically while editing cost can be shifted onto the author where it belongs. Currently, due to retyping the submitted paper for printing purposes, copy-editing is done by the journal.

We can also compare the cost of the E-Print Archive at the Los Alamos, described above, to the AER. Paul Ginsparg of Los Alamos received a one million dollar grant for 2.75 years. The archive had 1,185 papers posted in one month (June 1996), or approximately 14,000 papers per year, which works out to an average cost of $27.63 per paper. Through the year ending August, 1996, the AER published 175 articles (long, short and proceedings) with costs of $881,000 (Deloitte-Touche (1995)). That works out to an average cost of $5,034 per article. Admittedly there is an editorial, referee and copy editing process with the AER, as well as distribution. If the figures above in Jog hold true, approximately $2,000 per article are due to printing and shipping.

For the near future, mixed paper and electronic journals are likely. It would seem that a fee based paper version, and a freely available electronic version, would lead many to abandon the paper version. However, if paper versions are priced at cost, this will not harm the journal financially if its first copy costs are otherwise supported, as described above. While this sounds unappealing, lower and mid-level journals are now being canceled by libraries. Thus, the model described above could well be their savior--in the current subscription model, they could fold, much as the scholarly monograph market has in other areas of academia.

It is also useful to look at the cost of using paper journals. For their readers, paper journals carry a high opportunity cost. If the desired journal is in your office (taking up precious shelf space), it probably will not take too long to find the article. More likely, it will be in the library, entailing a round trip of perhaps half an hour (assuming the journal is carried by the library and it is correctly shelved). Finally, if a local copy is not available, Inter-Library Loan must be used, and the delay will be measured by days or weeks. In the on-line world described above, any journal can be read with just a few clicks of a mouse.

Looking beyond costs, according to Harnad, there is little role left for libraries, and even less for publishers (at least with their current business model based on subscriptions). Libraries and publishers, not surprisingly, tend to see the future in different terms--they see networks as simply adding another distribution method to their customers. And in the transition phase, librarians see one more demand on their budgets from paper journals who charge extra for the electronic version.

Of course, any move to the system that Harnad proposes is likely to be interesting, to say the least. Sufficient technology already exists, and the economics appear to be largely favorable (if first copy costs of an all-electronic journal are truly dramatically lower), but there are many ``social'' issues still to address: will promotion, tenure, and annual review committees accept electronic publications?; how much will entrenched interests fight changes?; will authors submit ``good'' papers to start-up electronic journals?; can universities supply all of us with 17 inch color screens and a printer?; etc.

There are some important issues with electronic journals and electronic posting of papers. First, a paper may reside on a home page of an author and also in a ``journal''. As we have argued that electronic journals have very low publication costs, so there is little concern whether the article is viewed from the home page or from the journal itself. Since the journal should have the most up-to-date version (at publication time), readers would be well advised to obtain their copy from the journal.

Second, anyone can post a paper on a server on the Net. As distributing hard copy working papers is costly, they are limited in their distribution. Not so with electronic posting. Due to costs, most academics receive relatively few hard copy working papers--selection is often for the wrong reason--cost. With an electronic world, how does one keep from being swamped with a glut of papers? We estimate that there may be 20,000 working papers produced in economics each year. In the electronic world, one may have access to these 20,000 papers and selection, via some method, is extremely important. If anything, in the electronic world, the importance and use of a journal becomes greater than it is in the hard copy world. Journals provide a significant means of selection, while search mechanisms, notification lists (either from a server or directly from the author), even and word of mouth provide others. And the electronic era allows other models of selection--a possible model is that readers rate papers posted on servers, and you would consult the ratings to limit your search of interesting articles. Such a system has existed on the Net for movies since 1991, and Hal Varian has proposed a similar system for academic articles. There are many such rating systems under developement. For example, Wisewire takes an approach which is easily adaptable to academics. Topics are called U-Zines; we can imagine topics by JEL classifications. Again anyone can rate within a topic (or start a new topic), and the server (like a journal) then shows you papers which, by its software, determine similar interests to yours by your rating of papers. While many hi-tech solutions have been proposed, it is interesting to note that on the E-Print Archive at Los Alamos, there are no such selection tools, in spite of more than 100 submissions a week to the archive. Apparently, physicists have little trouble sorting through this number, to find what is interesting and important.

Finally, there is the obvious problem of the ``installed base'' of paper journals. The Mellon Foundation has funded some interesting work in with the JSTOR (Journal Storage) Project, where they have taken back issues in seventeen economics, ecology, political science and history journals and used optical character recognition technology to create electronic versions. Details can be found in Varian (1997).

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