Article

The Benefits of Diverse Preferences in Library Consortia

Doh-Shin Jeon, and Domenico Menicucci

Abstract

We study the case in which a library consortium increases the aggregate payoff of the member libraries. We find that libraries with similar preferences are likely to lose from building a consortium and that those with diverse preferences are likely to gain by doing so. Combining libraries with diverse preferences implies that their valuation for different publishers' journals is more symmetric, which intensifies competition among publishers for scarce combined budgets. A tension between short term and long term considerations might generate a ‘library consortium trap.’ Our insight can be applied to other buyer groups as long as competition is generated by buyers' budget constraints.

Replaces

Doh-Shin Jeon, and Domenico Menicucci, The Benefits of Diverse Preferences in Library Consortia, TSE Working Paper, n. 13-425, August 21, 2013, revised December 2015.

Reference

Doh-Shin Jeon, and Domenico Menicucci, The Benefits of Diverse Preferences in Library Consortia, The Journal of Industrial Economics, vol. 65, n. 1, March 2017, pp. 105–135.

Published in

The Journal of Industrial Economics, vol. 65, n. 1, March 2017, pp. 105–135