I for one then would be most careful in applying a model from economic theory to the analysis of faculty journal subscriptions without thoroughly reviewing all the assumptions that a particular model asks me to accept. Richard W. Meyer makes some interesting points. He also demonstrates how misleading it can be to pile one assumption on top of another without having done sufficient preparation. One major factor in the confusion is the tendency for publishers to simplify their policies. Individual prices are often set at an arbitrary percentage of the library price or vice versa.
Some publishers have no price differential.
While the theory of marginal-added cost justifies the individual price rationale, it does not actually come into play very often. Prices are set six months before renewal and other circulation figures are known and 18 to 24 months before costs are in. As a result, price decisions may be influenced by economic events one or two years past. In short, if you wish to understand how a watch works, you really must look inside. Moreover, the commodity model is not appropriate for science journal subscriptions.