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A comment on Science, Now Under Scrutiny Itself. Parent comment

Re:Science, Now Under Scrutiny Itself by hackuser on Wednesday June 17, 2015 @06:25PM (#9735682)
I don't know about that industry, but generally prices don't depend on the sellers' costs. Prices are set to maximize profit, that is to maximize (volume * net profit). Sometimes that's a huge markup (e.g., the $5 soda at the movie theater), sometimes that works out to a loss (e.g., the 2-year-old smartphone on clearance). There are many complexities of course, such as loss-leaders, regulated markets, public goods, exploitative pricing, etc.

I've read that the journals realized that they had a captive audience, i.e., that college libraries had no choice but to subscribe in order to support their faculty, and the publishers raised prices dramatically. There was a backlash from some schools at the time.

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Re:Science, Now Under Scrutiny Itself by nycticorax on Saturday June 27, 2015 @05:47PM (#9791631)
"I don't know about that industry, but generally prices don't depend on the sellers' costs." What you're saying is true only if the revenue at the optimal price is higher than the seller's costs. If the revenue at optimal cost is lower than the seller's costs, then generally the product won't be produced. Therefore if the product is still being produced, the seller's costs put a lower bound on the revenue. If the volume is fixed, this means a lower bound on the price. If the volume is small, this lower bound can be high.
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Re:Science, Now Under Scrutiny Itself by LyndsySimon on Thursday June 18, 2015 @01:19AM (#9736950)
These days, scientific publishers are bundling everything together into one package, commonly known as the "Big Deal". Institutions pay a single fee for access to hundreds or thousands of journals.

Here's a paper that explores the idea and its impacts - http://www.vanderbilt.edu/econ/faculty/Wooders/APET/Pet2004/...

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Re:Science, Now Under Scrutiny Itself by hackuser on Thursday June 18, 2015 @02:30PM (#9740650)
Like cable TV
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