---
title: "Economics of open science"
chunk: 11/15
source: "https://en.wikipedia.org/wiki/Economics_of_open_science"
category: "reference"
tags: "science, encyclopedia"
date_saved: "2026-05-05T03:49:05.253185+00:00"
instance: "kb-cron"
---

=== Transaction costs ===
In a market economy, the diffusion of private goods is usually assorted with transactions costs. Theses costs cover all the services required to manage the commoditization of a product, both from the side of the producer as from the side of a consumer. In a wider sense, it encompasses all the work and time allocated all the stakeholders of the transactions to perform it, such as benchmarks, negotiations or contractualizations.
Savings on transaction costs are frequently quoted as a significant advantage of non-excludable resource system (common good, public good) over private markets. Since access to the resource is weakly restrained and conditioned by unformal rules, its allocation is less costly overall: "a community could (...) produce better quality outcomes at lower economic costs, because of lower transaction costs, than alternative institutional systems involving private property" According to a 2017 OECD report, market allocation of open knowledge outputs is not sufficiently efficient: as the price of a public good converges to zero, any attempt at setting up a price will result in excessive exclusion and reduced collective benefits.

The market may not be the best mechanism for the allocation of a public good, as any price above the marginal cost (of copying and distribution) will reduce net welfare – by locking out users and uses that do not have the capacity to pay or are not willing to pay. For digital information made available online the marginal cost is very low – close to zero. However, a price set at zero or close to zero will not be sufficient to cover full costs (…) To be sustainable, data repositories need to generate sufficient revenue to cover their costs, but setting a price above the marginal cost of copying and distribution will reduce net welfare.
All the models of open science have a direct impact on one sub-sample of transaction costs: exclusion costs. There is no need to maintain systems of enforce rules to ensure that a publication will not be used by an unauthorized reader: "This exclusion costs the excluder money. One cost is digital-rights management or DRM, the software lock that opens for authorized users and blocks access to the unauthorized. A second cost is writing and enforcing the licensing agreement that binds subscribers." In addition to DRM system, large commercial publishers have also developed intrusive methods to track subsequent usages of a publication.
Non-commercial Open Science journals and open infrastructures can mitigate a larger range of services and costs. Author-paid journals still have to maintain transactional activities, as the management of article-processing charges becomes a core business activity. Moreover, the real cost of large commercial agreements with leading publisher is not well documented as the proceedings of big deals are not public. Even in the context of journal flipping, the negotiation of complex licenses may represent a significant time investments from library and research institution.