ABSTRACT
This chapter reviews some economic models for setting user fees for libraries, discusses their informational requirements, and analyzes some practical problems that developed in attempting to apply these models to a specific institution, the Cleveland Health Sciences Library. A behavioral theory of nonprofit institutions is just beginning to appear in the economic literature, and the emphasis of this literature is on the complex objective function of these institutions. Most large research libraries exist in an economic environment in which they can act as "price setters" rather than "price takers." Implementation of Price Leadership model would require information concerning the total demand for library service, the economic costs of library service, and the "self-supply" function of library service by users. The simplest model would involve the direct application of marginal cost pricing—that is, the library would set user fees equal to the marginal cost of an additional unit of library service.
