Wow, Lawrence, I couldn't disagree with you further. It seems like you're teating this as if it's a zero-sum negotiation - the less you have to pay the DJ, the more you "win", and each extra dollar you pay the DJ is an additional "loss" on your end. I guess, from a purely economical Milton Friedman point of view, you may be right (but that's not taking into account the loss of goodwill over time, so economically it actually may not be right...) Besides, the object of the game isn't "to make the most money", or is it? (Maybe we're just coming at things with different underlining premises.)and the amount someone "should" accept is simply the lowest that the person is willing to do it for...The above sentiments should be rephrased to say, "the Exchange should offer a bare minumum that is necessary to get who they want to come to actually accept the offer."
But forget economics for a second and let's just see what makes sense (at least to me) socially. Let's take the Austin Exchange as a hypothetical example. I'm sure you can easily get Nate, MooCow and Jeramie (although I guess he doesn't count as Austin anymore), you can get Kalman and Jerry from Dallas, and Pattykins from Houston. That's 6 great DJs, definitely enough for an exchange, and you didn't fly any of them in. And, because they're all so nice, you could probably get away with saying something like "Hey, let's face it, you were planning on coming anyways, and even though we get hundreds of attendees and definitely make a profit, we don't want to pay you much, if anything. Every dollar we pay you is one less dollar that we make. In fact, there are other DJs just dying to get the opportunity to say they DJed the Austin Exchange and they'll do it for free, so according to the Laws of Supply and Demand, we don't need to pay you a cent."
I understand that you can say something like that, but I don't understand why you would want to say something like that. Why would you try to squeeze every nickle out of someone and not show that you appreciate them just because you have the upper hand in the Supply/Demand balance and you can get away with it? Assuming you financially can (and most exchanges indeed make money) Why not go above and beyond, just like many exchanges go above and beyond by offering free snacks at the after-hours venue. Surely they didn't need to offer food, or a limosine to drive attendees to the airport, and they could have saved a couple bucks.
But even more importantly, I really hope, Lawrence, that most organizers don't have this attitude when dealing with actual musicians. There's one promoter here in NYC that has a reputation for being as cheap as possible; whatever he can get away with; why in the world pay a band $1000 when I can give them a sob story and only have to pay them $500? And, well, not to get off topic, but let's just say it's been quite bad for the scene and a terrible way of trying to foster community between musicians and dancers.