We compete cheerfully and aggressively with each other to produce journals that will provide the highest possible value to our readers. We also occasionally discuss questions of policy and administration that have common effects on our journals. Recently we have observed behavior by some authors that we feel is counterproductive to the collegial process of producing high quality academic journals, so we thought it useful to communicate a few common thoughts to our readers and prospective authors.

The finance profession is producing a lot of papers that are submitted for review at our journals. The scarcest resource we have as a profession is the supply of time donated by referees to read, consider, and comment on their colleagues' work. The fees paid by journals to referees for delivering timely constructive criticism are trivial relative to the opportunity cost of time for these busy individuals. In general, the referee does not know who the author of the paper is and the author does not know the identity of the referee, so there is no mechanism for authors to directly reward referees for the helpful advice they receive. While this system has the benefit that referees can express honest opinions about the quality of the work without alienating the author, it also has counterproductive consequences in that it can lead authors to undervalue the services they receive. We are particularly troubled by two practices that seem to be on the increase.

First, some authors submit papers to journals at a relatively early stage of production in the hope that "the referee will help me figure out how to revise it to make it publishable." In effect, by paying a submission fee the author is buying very cheap consulting advice on how to write the paper. The real cost of this strategy, however, is that the referee and editor are much more likely to simply reject the paper as being too far away from being publishable and prohibit future revision and resubmission. Any editor at a journal with high rates of submission is constantly pondering the costs and benefits of giving authors another chance. The costs are high. The perception that an author is intellectually disorganized, or has not put an appropriate level of care into preparing the manuscript, raises the perceived costs further. In effect, by submitting a paper that is not polished and well written, an author often cuts off a potentially valuable publication outlet.

A second, related problem occurs when authors, after receiving a rejection decision, immediately send the same paper to another journal in the hope of "having better luck" without revising the paper to reflect the feedback they have received. We fully understand that authors disagree with referees and editors who reject their papers. We also want to emphasize that each of us is willing to publish papers that have been rejected by the journals we compete with. Our judgments about the importance of the contributions of papers we review are made independently. However, outcomes are not completely uncorrelated. We use the same pool of referees to help us evaluate papers and quite frequently discover that we have chosen someone to review a paper who has handled it for another journal. In most cases, the potential referee will advise us of the history, and say, "I already reviewed this paper for ___ and it looks like the author (has/has not) revised the paper to take my comments into account." Each editor has his or her own policies for dealing with such situations, and generally authors get a new draw on the referee.

It never helps the author's case, however, if he or she has not made any effort to use constructive feedback. And we are observing too many instances where this appears to be the case: basic problems like typos and omitted references are not corrected, let alone more substantive concerns. In such situations, it might appear that the author is simply hoping that the second journal and referee will make a mistake and miss problems identified by the first referee and journal. This behavior sends a strong signal to referees and editors that the author views the review process as just a screening process subject to random mistakes, rather than a means of receiving constructive criticism that will help the author improve the paper. Given the quid pro quo nature of the review process, where referees are contributing their scarce time with little compensation, the willingness of referees and editors to work with authors to improve their papers is reduced when they perceive that a particular author does not value their suggestions.

So how should authors maximize the value of the journal review process? They should circulate their papers and give seminars to colleagues to receive constructive criticism before submitting to a journal. They should revise and polish the paper until they believe it is of suitable quality to have a good chance of acceptance at the journal. After receiving a referee's report and editor's letter, authors should carefully consider how to improve the paper so that the issues and questions raised by the referee and editor are addressed as best they can be.

We hope these comments are taken in the spirit in which they are given. The opportunity to serve as an editor is a privilege. It provides each of us with the chance to observe the inner workings of a community of scholarship. It imparts a deep appreciation for the importance of the peer review process, and of the generosity of the hundreds of individuals who help us, and help their colleagues, by sharing their time, their expertise, and their creativity in serving as referees. We encourage authors to value these shared resources as well.

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Some Thoughts from Other Members of the Finance Profession

1. Recently, I, like other colleagues, had the opportunity to read the joint editorial posted on the JFE website. As an author who has often regretted submitting things too early, I thought I would write with some feedback on how authors perceive the process.

   I think the editorial is an excellent and timely admonition to authors, and that our current JF, JFE, and RFS team of editors is doing a great job. Your editorial, however, appears to put referees on a pedestal but does not sympathize with authors. People in the profession are not systematically unreasonable. So if editors are seeing things submitted too early and outlets being switched too rapidly, then it likely is the case that many rational authors perceive that there are problems with the system.

   Basically, we are in a profession where there is a lot of room for subjectivity in the review process. Therefore, authors are apt to get disillusioned very quickly:

   • The revise-and-resubmit process is onerous and subjective. Authors break their backs making changes to satisfy the views of the referee often believing that the process will have little impact on the contribution. Authors submit unpolished work because they know r&r's are inevitable anyway. More (deserved) acceptances of the work of lesser-known authors on the first round would help this situation. The screening process should reward only the merit of the contribution, which, of course, must be well-executed.

   • As a referee, one often feels pressure to provide a "revise-and-resubmit" on the grounds that not writing a detailed report says something ill about the competence of the referee. Referees sometimes feel that to get on editorial boards and stay on boards, it helps to write long, detailed reports whether the paper is immediately publishable or is unpolished (i.e., referees feel that it helps to be Mr. Nice Guy when writing a report). That is why r&r recommendations appear to be on the rise. If referees rejected 85-90% of papers they received then the editors would have to make fewer calls on a second chance. For this, referees must be given security that editors trust them even if they write half a page on poor papers. It seems it would help to make clear that it is not the referee's job to help improve research, but to evaluate research. I have rarely seen any guidelines provided to referees, unlike in AER or Econometrica.

   • Authors feel they have lost the right to say what they want, so that what they are allowed to say is largely a function of the referee chosen. For example, if an author writes a paper with a behavioral slant, authors know that every editor knows which referee is likely to let authors sail on a behavioral story. Referees are rarely unbiased. Thus the process of "switching" is simply a matter of sailing on the hope that the second outlet will choose Mr. Behavioral as opposed to Mr. Asset Pricing. So it is often not a matter of the new referee "missing" mistakes but of the new referee being more ideologically inclined towards the work. More intervention by editors on this count would be very helpful.

   • Personal likes and dislikes and professional rivalries play a big role in acceptance or rejection. Referees often know the identity of the author (just "Googling" the title usually does the job) hence countless authors with mildly controversial personalities fall victim to the political process.

   • The obvious answer to the "same referee" problem is to expand the referee pool. Authors often feel that there are clubs of referees and there is no effort by editors to expand the pool. But the problem seems to be that editors are loathe to use new referees. It is much easier to fall back on someone who did a good job the previous time around. Biases could be reduced on average if many more referees are used. Usage of more referees also helps reduce ill-will by convincing people that nationwide opinions are valued, as opposed to the views of a small set of people. Also, by sending papers to lesser-known referees and giving them feedback on how they did, one could get many more people to share their opinions on good research with the profession.

   By and large, our editors are doing a great job. But while the view that authors are being too opportunistic has merit, it is only one side of the story. The other side of the story is that authors are responding to what they perceive to be a subjective, ideological, often biased, process. The more efforts editors make to address this issue, the less the cynicism on on both sides, and the better off we are as a community of scholars.

   Best regards
   Subra
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   Avanidhar Subrahmanyam (Subra)
   Professor of Finance
   Co-editor, Journal of Financial Markets
   subra@anderson.ucla.edu
   Phone: (310) 825-5355 Fax: (310) 206-5455
   Address:
   Box 951481, The Anderson School
   UCLA
   Los Angeles, CA 90095-1481
   

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