Economics and Usage of Digital Libraries: Byting the Bullet

Dynamic Optimal Choice

Access product purchasing decisions made by institutions have a profound impact on the costs faced by users, and thus on the realized demand for access. Therefore, in deciding what access products, electronic or otherwise, to purchase, an institution must not only consider the demand realized for a particular level of user cost, but also what would be demanded at differing levels of user costs. Likewise, in our determination of the optimal bundle of access products, we should not take the given set of accesses as fixed and exogenous. As a simple example, let us assume that a subscription to a given journal requires 25 accesses in order to pay for itself. Now assume that the institution in question did not subscribe to that journal, and that 20 tokens were used to access articles in the time period. At first look, it appears as though the institutions did the optimal thing. Let us assume, however, that we know that accesses would increase by 50%, to 30, when no password is required. It now appears as though the institution should have subscribed, since the reduced user costs would stimulate sufficient demand to justify these higher costs.

In Table 6.4 we reported results that allow us to estimate how much usage would increase if no passwords or other user costs were incurred. We now calculate the product purchases that would have optimally matched the usage demand that we estimate would have occurred had the library removed or absorbed all user costs. We report the results in Table 6.14.[27] For most institutions, the optimal number of journal subscriptions increases, because greater usage makes the subscription more valuable. In general, the estimated institution cost of the optimal bundle would not increase greatly to accommodate the usage increase that would follow from eliminating user costs. Although we cannot quantify a dollar value for the eliminated user costs (because they include nonpecuniary costs such as those from requiring a password), we show in the last two columns that the modest institutional cost increase would be accompanied by comparable or larger increases in usage. The greatest cost increase (48%) occurs for the institutions (14 and 15) at which generalized subscription tokens were not available and the institution did not directly subsidize the per-article fee, i.e. at those institutions where users faced the highest user costs. Thus, the higher institutional costs should be weighed against high savings in user costs (including money spent on per-article purchases).