Confidentiality clause is back in at Nature

Peter, I think you may be conflating *pricing transparency*
with 
*price discrimination*.

Price discrimination is charging different prices to
different 
customers for the same good or service. It is practiced
because 
it results in greater profits than if a company charged a
uniform 
price to all customers. Price discrimination is practiced at
the 
movie theatre (age discrimination), for a haircut (gender 
discrimination), and for airline tickets (by charging
business 
travelers more than vacationers). Consumers (and collection 
librarians are consumers too) often despise price
discrimination. 
Those who pay more don't believe that it is "fair"
to pay more 
for the same service, and those who pay less may feel that
they 
could have received a better deal.  Nature simply doesn't
want 
astute people like Rick Anderson to compare the price they 
charged him with the price they charged another library.  If
Rick 
thought he was charged too much, he would argue for a better

deal.  If he got a great deal, he may tell his colleagues at

other institutions what he paid.  Enter the confidentiality 
clause.

Price discrimination only works when the producer has some 
monopoly power, which means that the customer cannot equally

substitute one product or service for another. In an exact
sense, 
each journal is a monopoly since it is composed of a
collection 
of unique articles not found in any other product.  There is
no 
use substituting the journal Nature for Science -- you need
them 
both.  On the other hand, you can swap an Emerald journal
with 
another Emerald journal because they contain the exact same 
collection of articles (sorry, couldn't help myself 

Price Transparency, on the other hand, should lead to lower 
prices for buyers, since it leads to "perfect
information" in the 
marketplace, and hence competition.

--Phil Davis
(dangerous enough to know a little economics, which will
inevitably get me
in trouble on this list by the likes of Mark Danderson, who
was actually
trained in economics).


At 03:22 PM 9/28/2006, you wrote:
>While I understand the desire for pricing transparency,
I can't
>think of an industry where it is practiced, or
understand the
>value to the buyer, since it often favors the seller.
>
>When I was a publisher and purchasing printing,
composition, or
>Web services, there was no openness in pricing. I am
sure in
>other services purchased by universities, from IS
services to
>construction, contracts are awarded in response to RFPs,
often on
>a closed bid basis.
>
>Perhaps there are economists on the listserv who can
comment on
>whether open or hidden pricing trends lower pricing for
buyers.
>My experience with printing services is that closed
pricing
>drives down prices, as printers cut margins to the
minimum or
>bundle services to gain business. I would think that
librarians
>have the greatest bargaining power when they are not
operating
>from a take-it-or-leave-it menu of prices.
>
>Peter Banks
>Banks Publishing
>Publications Consulting and Services
>pbanksbankspub.com

------------------------------------------------------------
-----------
Philip M. Davis
PhD Student (and former Science Librarian)
Department of Communication
336 Kennedy Hall
Cornell University
Ithaca, NY 14853
email: pmd8cornell.edu
work phone: 607 255-0354
web: http://www.
people.cornell.edu/pages/pmd8/