Why not underwrite hybrid fees?

December 20th, 2009

Several publisher representatives have recently asked about why the Harvard open-access fund does not cover hybrid fees. I thought I’d explain my thinking on this issue, though I am certainly not doctrinaire when it comes to institutional underwriting of hybrid fees, and am perfectly in accord with institutions coming to different decisions on the issue.  In fact, as I mention below, I can imagine (counterfactual) situations in which I would support Harvard’s open-access fund underwriting hybrid fees.

In the case of the current Harvard policy, I’ll explain why for the time being at least we are not underwriting hybrid fees.  My comments extend the arguments I give in my PLoS Biology paper.

Hybrid fees would be worth supporting to the extent that (as their proponents claim) they provide an approach to smoothly transitioning to an open-access publication fee business model.  The argument is that as uptake increases in payment of the hybrid fees, revenue smoothly shifts from the reader side to the author side in a revenue-neutral way.  At the end, the journal is openly accessible, with hybrid fees (now become just publication fees) providing the revenue.  To the extent that the hybrid system works this way, there is no “double dipping” — using hybrid fees as a way to increase revenue rather than transitioning to OA in a revenue-neutral manner.  I’ll call such a model “true hybrid”.

There are two problems with supporting hybrid fee systems.  First, they may not be set up in the way just described as true hybrids, and determining whether this is the case may in fact not be possible.  Second, even if they were set up in this way, game-theoretic problems may inhere in the system that prevent them from realizing the transition.

Whether “double dipping” is going on is independent of when the hybrid option is set up.  In particular, whether a journal is hybrid from the start or a hybrid option is added well after the journal is founded is irrelevant.  What matters is the dynamics of how hybrid uptake affects subscription fees and revenues.  To be a true hybrid model, hybrid fees must be set at a rate no more than the true average revenue per article, so that universal uptake of hybrid payments is not a means to revenue enhancement.  Further, uptake of hybrid fee revenues must be directly offset by reductions in subscription fee revenues, so that incremental uptake of hybrid payments is not a means to revenue enhancement.

True hybrid journals must therefore have a degree of transparency that is difficult to imagine achieving.  The journal would have to demonstrate linearly decreasing subscription fees in direct proportion to the hybrid fee uptake.  Determining hybrid fee uptake is straightforward.  But determining subscription fee reduction is not.  Publishers practice price discrimination, bundling, and price changes over time, which separately and together make it impossible to tell what a subscriber’s costs would have been absent the hybrid fee discount.  The issue of transparency is not all or nothing.  Certainly some publishers, Oxford University Press for instance, may be more transparent than others in their hybrid discounting practice.  But determining whether appropriate reductions are taking place is difficult at best.

Even if there were some way to determine that a journal were a “true hybrid”, receiving no incremental revenue from its hybrid program, there is a more fundamental problem with the normal way in which hybrid programs are implemented, viz., that subscription revenue reductions are shared among all subscribers.  As institutions decide whether or not to underwrite hybrid journals, they are confronted with a kind of prisoner’s dilemma.

In a prisoner’s dilemma, a set of agents can either cooperate or defect.  If they all cooperate, all are better off.  But if any defect, all are worse off except for the defector.  In the case at hand, a cooperating institution underwrites hybrid fees, a defecting institution does not.  Given a status quo ante (as we have) of all institutions defecting, all would be better off if they cooperated, since they would pay the same amount (true hybrids being revenue-neutral) but would gain open access.  However, at the margin, an institution cooperating sees increased costs from the hybrid fees, but only a share (and a small one at that) of the subscription revenue reduction.  Defectors see a reduction in their subscription costs relative to the status quo ante at no cost to themselves.  Though both fully defecting and fully cooperating are equilibria,[1] there is no transitional path from the former to the latter.  This is an inherent flaw in the hybrid system as traditionally conceived.  Empirical evidence accords with this analysis; uptake of hybrid fees has been exceptionally low.

It may be that institutions can be convinced to act temporarily against their financial interests in the expectation that others will join them and the cooperating equilibrium will be reached.  Especially in the current economic climate, I’m not sanguine about this prospect.  And without such temporary action against self-interest, the hybrid model is no transitional model at all.  If however, evidence accumulates that the transparency problem can be addressed and true hybrids can be identified and institutions appear increasingly willing to pay these fees against temporary self-interest, I can imagine that the Harvard fund might then change its policy for support.  Similarly, if changes to the hybrid model were made that eliminated the prisoner’s dilemma — I believe that this may be possible, and hope to talk about it in a future post — then again hybrid fees ought to be supportable for true hybrid journals.


[1]Actually, full cooperation is not an equilibrium per se, as each agent still has an incentive to defect from cooperation even at that point. However, once all agents (or even most) were to cooperate, the hybrid system could be jettisoned for a true OA model that effectively removed the defecting alternative.

9 Responses to “Why not underwrite hybrid fees?”

  1. Stevan Harnad Says:

    Even if current “true average revenue per article” were the verifiable basis of the Gold OA article publishing fee, and even if double-dipping were verifiably preventable, and all excess revenue were verifiably translated into subscription reductions, how would this prevent the current “true average revenue per article” from being locked in, preventing further cost-cutting with time? Between-journal competition?
    AN ALTERNATIVE SCENARIO

    There’s an awful lot bundled into that “true average revenue per article” today: print edition, online edition, archiving, preservation, dissemination, marketing, fulfillment. Would a locked-in price allow any reliable way to downsize to, say, just providing peer review, if that’s in the cards? (This problem is not exclusive to hybrid Gold OA: it applies to full Gold OA too.)

    And I would describe the overall situation — both with hybrid OA and with full OA “membership” — not so much as a prisoner’s dilemma but an evolutionary unstable strategy. The cause of the instability is pre-emptive Gold OA payment of any kind, while subscriptions still rule the roost, journals are still co-bundling many obsolescent products and services, and we don’t yet have OA.

    One reliable way to scale down the co-bundled extras — if that’s in the cards — is indeed competition, but from (mandated, universal) Green OA.

    If you can access the content for free, you are unlikely to want to pay for the paper edition, the print edition, online edition, archiving, preservation, dissemination, marketing, fulfillment, any which way. Moreover, the worldwide distributed network of institutional repositories providing the Green OA content would also be the natural way to offload the distributed cost of archiving, preservation and all access-provision.

    And another advantage would be that with Green OA there is no need to provide any pre-emptive Gold payment today at all (except to keep the principle of a transition to Gold OA primed in the wings)… OA first; then we talk about the true cost of the underlying service. Not locking in the “true average revenue per article” today.

    Just a thought, on alternative scenarios perhaps worth considering.

  2. Stuart Shieber Says:

    I often find myself agreeing with Professor Harnad. First and foremost, we agree on the primary conclusion of my post, that institutions should not at present underwrite hybrid OA fees. We also agree on the utility of self-archiving, and efforts to increase the practice; his many activities to this end are worthy of the strongest support. I plan on writing a full response to Professor Harnad’s important question “[H]ow would this prevent the current ‘true average revenue per article’ from being locked in, preventing further cost-cutting with time?” in a later post. But I cannot allow his statement “OA first; then we talk about the true cost of the underlying service” to pass unremarked.

    Professor Harnad is welcome to his well-known and oft-repeated opinions on whether OA journals should be supported or not, but to abjure any talk about the issue is inconsistent with the very premise behind open access, which is free and open discussion. Mere repetition of arguments does not provide them with further foundation, and may in fact be counterproductive to their promotion. Nonetheless, in the case of speech with which one disagrees, “the remedy to be applied”, as Justice Brandeis said, “is more speech, not enforced silence.”

  3. Stevan Harnad Says:

    You’re right, Stuart. Badly expressed. I meant, and should have said, “OA first, then we talk *payment*.” Of course one can talk about anything at all, including price, any time. It’s just that the price of Gold OA is likely to be very different after Green OA prevails, compared to now.

    Enforced silence? (What power do I have to enforce silence, even if I wished to, which I don’t — on the contrary!)

    I hope I’m not known for giving opinions, rather than reasons and evidence. Oft-repeated, but exceedingly rarely taken into account, or answered (which is why I’m forced to keep repeating them so often. (If I could enforce anything, it would be that reasons and evidence should be taken into account and answered!)

  4. Stevan Harnad Says:

    PS Forgot to add that I really do look forward to Stuart’s answer about pre-emptive payment, co-bundling and price lock-in!

  5. Amir Says:

    I am not very familiar with the publication model you are advocating, hence my question:
    If you are successful in establishing this particular OA publication model, does every author (or his/her institute) have to pay for publication of his/her articles?
    How about authors who work in the areas of inquiry where funding is not very widespread?
    I personally can usually fund my main line of research, but there are some side-lines which I continue to work on but cannot find any funding for them. I think that is not because those areas are worthless. They are just not very fashionable these now. My experience is that if you keep working on some forgotten areas and give them living, suddenly a lot of people become interested and see the point of your research. If I had to pay for publishing my papers, I could never publish them because there simply was no funding for the research. But, I could publish my work and after couple of years people are seeing the advantages of my approach and citing the work. The conditions are even worse for researchers who work in developing countries where funding is scarce. I know some of the OA journals may waive the publication fee if the author is not able to pay the fee. But I can tell you that it does not feel good to apply for fee waiver.
    The bottom line is that I do not think payment of publication fee from funding money should become the rule of publication.

  6. Stuart Shieber Says:

    @Amir: Great questions. Just as universities and funding agencies are now the source of funds for the subscription-based business model, I’d expect they would continue under an open-access business model. For grant-funded research, the funding agency should underwrite reasonable publication charges for disseminating the results of the research; that’s part of the research process and should be folded into the funder’s costs.

    But, as you say, not all university research is grant-funded, and in some subject areas, grant funding is essentially nonexistent. In those areas, the university itself is essentially acting as the funding agency. When universities hire faculty in those areas to carry out research, they implicitly take on responsibility for the costs of that research, and that should include dissemination of the results as well. So for non-grant-funded research, universities should commit to underwrite reasonable open-access publication charges.

    This is, in fact, the premise of the Compact for Open-Access Publishing Equity, which is already supported by Harvard, MIT, Cornell, and a growing number of other institutions. I’ve given a fuller argument for the compact in a previous article, and other posts in this blog talk about various aspects.

    For researchers without access to funds, reputable journals will waive fees, as you point out. And universities that do underwrite open-access publication fees typically support this by refusing to underwrite fees for journals that don’t have such a policy. It may not feel good to apply for a waiver, but at least this approach — publication fees with waivers — allows everyone to both publish in and read from journals. It feels much worse to be unable to read from journals because your library can’t afford the subscriptions, no?

  7. Amir Says:

    @Stuart: Thank you very much for the answers. I kinda agree with most of what you said. But again even though my research is generally well funded, neither the funding agency nor the university is willing to pay for OA publication of the papers that I publish outside my main (funded) line of research. Therefore, I normally publish them in subscription-based journals. However, I can see your point that one should not forget about the readers and I don’t. Many journals allow authors to post their last version of the manuscript on the webpage of their institute and I do post my papers online. Moreover, I have recently found out that my university has an agreement with Springer and they openly publish every manuscript coming from my university (and a whole lot of other partner universities) free of charge. That I think is perhaps a better approach. Universities can pay a lump-sum to the most relevant publishers and they will publish every manuscript coming from the university as OA. This sort of agreement allows me to make both my funded and non-funded research freely accessible.

  8. Eve Rich Says:

    Research fees sometimes cannot be paid due to lack of funding by the researchers or universities, but it is good that research papers can be published and fees waived so that results are freely accessible.

  9. Randy Koch Says:

    “But if any defect, all are worse off except for the defector. In the case at hand, a cooperating institution underwrites hybrid fees, a defecting institution does not.” It probably goes without saying that this concept becomes significantly more complicated when it applies to OA and the hybrid transition. Due to the competitive nature of humans and, by extension organizations, it may be difficult to form a smooth transition since their seems to be somewhat of an incentive to “milk” the system for what its worth while defecting. The “transparency” issue may add a further disincentive since one may wonder about the integrity of those receiving compensation. Having said that, I think there are a few known x factors that have enabled many cooperative endeavors to succeed; philanthropy and positive self interest being two. There are many examples of the “prisoner’s dilemma” being negated by the resolve of a few committed individuals or organizations to lock arms in plowing difficult ground. The flip side to the prisoner’s dilemma may be a sort of “hero’s opportunity” that inspires short term sacrifice for future gains. Maybe it’s why the Amish cooperate in harvesting their neighbors’ fields while corn is still standing in their own. Some folks just choose to do what’s right.