Another point to remember is that you can't submit to multiple journals at once, so the reviewing time is an opportunity cost for the researcher. This is of particular relevance for students like myself, who need to get papers published quickly in order to be able to show them on a CV and thus get a job (and the opportunity to do more research.
Later on, when one has a track record, it makes sense to aim high on a paper that has potential. It's never possible to be sure about a specific paper as one of the factors that goes into the decision of a journal to accept or reject a paper is what other papers have arrived recently. Back when I started out in Epidemiology (seems like a lifetime ago), this was true of our journals (like the American Journal of Epidemiology) as well. Fortunately, AJE has made a massive effort to improve things. This paper by Raymond J. Carroll shows a review time for AJE in 1999 of 15 months (figure 3). Yikes!
On the other hand, it is unclear what the optimal point is. I know of researchers who submit all of their papers to the top five medical journals "just in case" because it only takes a couple of months and, who knows, lightning might strike.
But it remains a very tough problem for junior people, like myself, who need to maintain momentum (both the volume of papers and the speed of papers). I do like the BMC Medicine model where the general journal reviews the paper and then refers the paper to a sub-journal if they think it would work there instead. I would publish in BMC journals a lot more if I was not so broke as I like their actual policies and practices a lot!
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