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Journals as clubs

Jason Potts


I am going to talk about the same topic, but rather what's the economics of reputation and journals? I want to look at this from the perspective of answering the question: what actually are journals and what are publishers? How does technological change effect them? We have had journals for a very long time. It has been tied up with publishing, and now we have the internet, and now blockchain is a new technology that comes in. What is the implication on journals, publishing and the way in which technology works in this space, at a very broad level?


The economists have been thinking about "what journals are" incorrectly. They have misdiagnosed them. What does blockchain bring to this space in a way that internet doesn't? This work was published a few years back like:

  • A natural history of stories, demes, knowledge and innovation.

  • A journal is a club: a new economic model for scholarly publishing

  • Do we need to move from communication technology to user community? A new economic ...

Economics of journals

This is a private solution to public goods (knowledge). So now these private publishers have a lot of market power, so what do we do-- do we regulate them, nationalize them, or what? The underlying economics is quite straightforward- it's a market transaction. That's all fine, and it's been true since the beginning of not just scholarly publishing but journals and books. Printing presses are expensive; the skill of putting them together is significant, and authors don't have that skill, and then off we go.

But then come computers. What these computers did is change the underlying specialization and division of labor by moving the capabilities more towards the writer or producer or journalist or scholar at the end. This gave rise to the open access movement that said the fundamental economics changed, so therefore the organization should change. This lead to a great deal of excitement. This started to gain pace around the late 1990s. Around the late 2000s, you couldn't shake a stick around... look, the economics are clear. We should be seeing a transition to open access publishing. That was a clear economic prediction.

Why economists got journals wrong

The problem is that it didn't really work out to the same extent as was predicted, like some sort of clear shift. Let's look at what the underlying assumptions. Scholars make knowledge, and journals communicate knowledge. Computers and networks are a communication technology. But I want to suggest that this assumption is fundamentally flawed in a way that has always been flawed.

We had some implications of that around, the --- costs got pushed back on to academics and scholars. There's still some skills involved in publishing. But the argument is that, it's not the cost of desktop publishing is not the issue, but rather it's the underlying specialization assumption. The new theory we developed around this was that this was never a public goods private goods discussion in the first place. What was instead going on is that scholarly production and dissemination of information wasn't like journalism where journalists write for a reading or viewing public. The whole thing was, the viewers, the reading public, were other scholars. It was a club model. The output of production was fed back into the input of production. It was never a broadcast model in the first place.

What journals are doing is engaging in this group formation process of creating a mechanism to facilitate the production process, not a dissemination process. So when the internet came along, people saw it as a dissemination tool which would revolutionize everything. Which is true, but what journals and scholars are doing is that they are part of a production process.

From an economic perspective, this is not private good public good but rather a club good which is more like a commons. It's a similar object. It essentially means you have a rivalrous... a non-rivalrous but excludable good up to the definition. What it means is that the underlying economics of this are a jointly produced shared group-produced resource, where members of the club benefit from other members being in it, these are readers and reviewers and the ideas. You care who those people are; this is not an anonymous club, it's important to know who they are because reputation goes into that. What a reputation does -- institutional mechanisms are doing to provide governance for that joint production process. Not just communication tools, there are rules and benefits.

A club is a self-organizing group

The argument we made here was that the correct economic model of this was club theory. A club is a set of rules that allows members to confer externalities or benefits on each other. This has important implications. The difference between clubs and markets is that markets get better as they get bigger, and clubs have optimal sizes beyond which they fail and they don't get better as they get bigger. Clubs are more difficult to make, and they don't require pricing mechanisms.

They have these specific properties: you voluntarily join them, they experience non-anonymous crowding, they form partitions and boundaries in a space (exclusive), and the underlying shared good that the group produces is not communication of results- it's not communication- it's mutual production and attention to an idea that is being developed. This process of individual papers is part of this process. Journals form around fields or problems, it's not an idea of a universal journal of science which is a terrible idea, and when you describe that it's basically journalism not a scientific journal. Nature is becoming a communication technology, not a scientific field in that sense.

Journals succeed when they behave like clubs

A lot of these details are in the manuscripts I mentioned. We looked at differential success of journals. They start to fail when they get beyond a certain size. A lot of this has to do with congestion problems and thinking about being in a very large club is that you're not going to get much access to publication, so there's a minimum-maximum size to these types of things.

Infrastructure for knowledge clubs

There are producers and consumers, and they are the same people here. When blockchain technology comes along and it is essentially an institutional governance tool that keeps track of members and who did what when, that's the infrastructure we've been looking for. Not the internet, which is a low-cost dissemination tool. The logic of where we rebuild journals using blockchain tech, makes from an economic perspective, makes sense. We should have been doing this all along.




If a journal is a club, we should be creating new types of journals that nurture the dynamic formation of new knowledge clubs. The underlying economic model here is correct, but now what specific technologies can we pull into this space? The argument here is that when we're thinkin gabout tihs, we're not trying to describe a universal communications infrastructure for dissemination of knowledge. What we're trying to describe is a production technology where a group of people come together and create governance infrastructure and tools and mechanism to collectively build and explore ideas as a group. The implication here is that journals have already been clubs, we just haven't had an effective institutional technology to deliver that as a single platform, we have laways had it separated out to different universities and schools. Blockchain provides an integrated technology for this, which is why to think about this from a revolutionary perspective not an evolutionary perspective. Thank you.