Rational Individual Decisions that Lead to Irrational Global Consequences

Column Editor:  Bob Holley  (Professor, Library & Information Science Program, Wayne State University, Detroit, MI 48202;  Phone: 248-547-0306;  Fax: 313-577-7563)  <[email protected]>

In a small community somewhere in France, Italy, or Spain, the villagers wish to honor a well-liked and respected couple on their 50th wedding anniversary.  Each of the fifty families in the village agrees to empty a jug of wine into a large vessel.  The couple happily takes the gift home only to discover that they have nothing but water.  Each family made the rational decision that substituting one jug of water for wine wouldn’t make a noticeable difference with the forty-nine other contributions of wine.  While the above is only a fable, the same principle often applies in today’s economy.  Corporations in their desire to increase profits have reduced wages, an extremely rational, if heartless, decision.  The global consequence, however, is an underperforming American economy because workers have been squeezed to the point that they don’t have enough money to buy what the companies are selling, which leads to reduced corporate profits.  In the same way, installing solar panels or windmills should cut electricity costs for home owners and make money for them through the sale of any surplus power.  The unanticipated consequence is that the electric utilities are finding that they don’t have enough revenue to maintain the electrical grid and must build enough capacity to provide electricity when the sun doesn’t shine and the wind doesn’t blow.  The utilities are thus asking for rate increases that undermine any savings from self-generation.  I won’t even say anything about the negative consequences for the economies of the developed world from couples not having expensive children.

Hiring the Best Faculty Candidate

Most search committees work hard to find the best faculty candidate to hire.  The days are long gone when middling schools didn’t interview graduates of elite institutions because these candidates wouldn’t accept the position.  The shortage of faculty positions even in STEM areas has completely changed things so that universities and colleges benefit from a buyer’s market.  The end result, however, has been a massive change in scholarly communication that has made life difficult for libraries.  As the shortage of positions for newly minted PhDs has increased, the rational strategy has become to do whatever possible to become a more desirable candidate.  Part of this strategy is to have an increasing number of publications to show the search committee that the candidate will achieve tenure and also enhance the reputation of the institution.  When I graduated with my doctorate in 1971, candidates weren’t expected to have any publications.  This has changed to the point that even undergraduates publish to enhance their potential for academic success.  Candidates for tenure-track faculty positions often have three or four publications plus multiple conference presentations and poster sessions.  New journals have appeared, and existing journals have increased their page counts to meet the demand for publishing channels.  Even if the quality of this higher scholarly output is good, which many doubt, the increased number of journals has stressed library budgets and helped created the current crisis in scholarly communication.  Furthermore, the increase has also made life difficult even for journal publishers as static library funding has been spread out over a greater number of potential subscriptions.

Increased Standards for Faculty Tenure and Promotion

The same factors as mentioned in the preceding paragraph apply to faculty who are seeking promotion and tenure.  Administrators and Tenure and Promotion committees know that they can demand more because so many candidates are waiting in the wings for an opening.  The unanticipated results, however, can be somewhat different and even a bit favorable for the scholarly communication crisis.  To give an example, I had a friend who, upon earning tenure, decided to screw the system that had screwed her for six years by taking several years off from publishing.  While part of the tenure process is finding faculty who will continue to be productive, merit increments, if they exist, and the possible promotion to full professor don’t rationally justify the push for maximum publication for those who have made it over the tenure hurdle.  Even the dedicated faculty member may now decide to focus less on the quantity and more on the quality of the publications.

Getting the Best Price

In these tough economic times, a rational strategy for collection development librarians is to negotiate the best price.  While I admit that this strategy is less likely to have negative global consequences, they can occur.  Libraries want vendors and publishers to stay in business to provide the services and materials that the libraries want.  To do so, these companies need to make a profit.  If the vendor pool in any area shrinks too much, the remaining players can increase prices as competition lessens.  The most dangerous situation occurs when a company is facing bankruptcy and decides to lower prices as a last-ditch effort to remain solvent.  If this strategy does not succeed in saving the failing firm, libraries may find themselves losing money for pre-paid materials or services or, at a minimum, having to use staff time to find new providers or update their records.  The Faxon debacle of 2003 caused some libraries to lose over $1,000,000 in serial pre-payments.  The effects of the recent Swets shutdown are yet to be determined.  I would hope that more libraries bought pre-payment insurance to protect themselves after the earlier disaster.

A second danger of negotiating a too-low price may occur with the approval plan.  The company that bids too low may stop providing materials that it is contractually obligated to supply but where it can’t make a profit by claiming that these items are not available.  For the library, the hassle of enforcing the contract is usually not worth the effort.  Libraries should blame themselves for a third risk when they prepay for a set that the publisher never intends to deliver after a sample volume or two.

The Big Deal

The big deal makes sense in that the library acquires a much larger package of materials for a relatively small increment over the price of purchasing individually what the library really wants.  The big deal vendors benefit by distributing their less popular journals and can satisfy their shareholders through the accounting trick of allocating costs across all the serials in the package.  The vendors also claim that faculty and students use the extra journals that came as part of the package.  One speaker at a conference once even contended that this use showed that librarians don’t really know what their users wanted, to which a librarian in the audience replied that faculty would stop using the journals once they discover how bad they are.  In any case, the unintended negative consequences of the big deal are well documented.  From the library perspective, the library loses budgeting flexibility since cutting an individual title in a big deal saves no money.  It is difficult to explain to faculty why their preferred title must be cut because it is an individual subscription when the mediocre title in a big deal continues to be purchased.  The big deal has also created pressure on university presses, scholarly societies, and small independent publishers to merge with the larger publishers with big deals or at least find some way to get their publications included in the packages.  The fact that the Université de Montréal got so much publicity for cancelling a big deal indicates that it doesn’t happen very often.

Patron-Driven Acquisitions (PDA)

I’ve left the most controversial topic for last.  I completely agree with Rick Anderson that a library has no obligation to buy any book, including one from a prominent university press, that doesn’t have immediate demand from a faculty member or student.  Where we disagree is about the consequences of this decision.  The Internet, the out-of-print book market, digitization, and print-on-demand have made PDA possible because most books remain accessible long after their initial publication.  If the library doesn’t buy the book today, the same book will most likely be easily purchased ten years from now when someone does want it.  It might even be cheaper.  The new, more restrictive PDA-purchasing model may well have several unintended consequences.  If the university press requires a certain volume of immediate sales to stay in business, this change will make the press less likely to select a book with limited marketability.  For example, a book on the Ferguson incident would be more likely to be published though it will be completely forgotten in five years rather than a book on eagles in 17th-century heraldry even if this book’s impeccable research will remain valid for decades.  In universities where a tenure book is required, faculty with niche research interests will be less likely to be hired or to receive tenure.  Since graduate students are intelligent, they will be more likely to choose popular research areas and thus narrow the scope of future scholarship.

Other pushbacks less favorable to libraries are also possible.  Some commentators suggest that university presses raise their prices.  Some presses manage to stay in business by publishing esoteric scholarship at high prices for those libraries that wish to collect comprehensively.  I doubt that most PDA libraries would stop purchasing the books their faculty want if the prices increased by 50%.  Another outcome would be for academic administrators to calculate the money that libraries are saving from PDA and to recapture some or all of it to subsidize that institution’s university press or to provide the gold open access fees for faculty that the administration wants to keep.  Administrators get paid to look globally at the institution’s goals and to move money around to meet them.


Do I have any answer to the issues raised above?  Of course not.  If I did, I would bottle the solution and become a millionaire.  It makes little sense when making rational individual decisions to worry about diffuse global consequences no matter how real they are.  For one or even a group of institutions to take the moral high ground would most likely have little effect upon the “system” and would penalize the individual institutions much more than it would solve the problem.  In some cases, as given above, the other side has potential pushbacks to make the rational decisions less rational and thus change individual behavior.  Groups can also seek to change the government rules, as is the case right now for requiring open access for grant-funded research, but doing so is difficult and can sometimes itself have unintended negative consequences.  The principle behind the issues raised above has been around since civilization began, and somehow humans have managed to muddle through for better or worse, though worse often has a higher probability.  Knowing this principle does help explain how the world works and the rationality behind some irrational consequences.


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