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Welfare and Pricing of Mail in a Communications Market

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Author Info

  • Philippe De Donder

    (Toulouse School of Economics)

  • Helmuth Cremer

    (Toulouse School of Economics)

  • Paul Dudley

    (Royal Mail Group)

  • Frank Rodriguez

    (Oxera)

Abstract

We build a model where a postal incumbent offering single piece, transactional and advertising mail competes with postal entrants and with a firm offering an alternative medium. We solve for the optimal prices under various competition assumptions. We calibrate the model and provide numerical simulations in order to shed light on the impact of these assumptions on volumes and welfare levels.

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Bibliographic Info

Article provided by De Gruyter in its journal Review of Network Economics.

Volume (Year): 10 (2011)
Issue (Month): 3 ()
Pages: 4

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Handle: RePEc:bpj:rneart:v:10:y:2011:i:3:n:4

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Web page: http://www.degruyter.com

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Web: http://www.degruyter.com/view/j/rne

Related research

Keywords: non direct mail; substitution; displacement ratio; Ramsey prices; calibration;

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References

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  1. Armstrong, M., 2008. "Access pricing, bypass and universal service in post," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
  2. Philippe Donder, 2006. "Access Pricing in the Postal Sector: Theory and Simulations," Review of Industrial Organization, Springer, vol. 28(3), pages 307-326, 05.
  3. Leticia Veruete-McKay & Soterios Soteri & John C. Nankervis & Frank Rodriguez, 2011. "Letter Traffic Demand in the UK: An Analysis by Product and Envelope Content Type," Review of Network Economics, De Gruyter, vol. 10(3), pages 10.
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