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Worksharing, access and bypass: the structure of prices in the postal sector

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  • E. Villemeur
  • Helmuth Cremer
  • Bernard Roy
  • Joëlle Toledano

Abstract

This paper studies a liberalized postal market where entrants may offer end-to-end products or concentrate on one of the segments of the network. Absent effective bypass, entry does not appear to be a serious financial threat to the incumbent, even when the products are perfect substitutes. This is no longer true when the entrant offers cheaper service in delivery. Then, the universal service provider may loose the entire pre-sorted mail market. It is left with probably low volume demand from households and from firms with high preparation cost, and its financial viability may be jeopardized. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • E. Villemeur & Helmuth Cremer & Bernard Roy & Joëlle Toledano, 2007. "Worksharing, access and bypass: the structure of prices in the postal sector," Journal of Regulatory Economics, Springer, vol. 32(1), pages 67-85, August.
    • Handle: RePEc:kap:regeco:v:32:y:2007:i:1:p:67-85
    DOI: 10.1007/s11149-007-9024-1
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    References listed on IDEAS

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    1. Cremer, Helmuth & Roy, Bernard & Toledano, Joëlle & de Villemeur, Étienne, 2004. "Worksharing, Pricing and Competition in the Postal Market," IDEI Working Papers 302, Institut d'Économie Industrielle (IDEI), Toulouse.
    2. Billette de Villemeur, Etienne & Cremer, Helmuth & Roy, Bernard & Toledano, Joëlle, 2003. "Optimal Pricing and Price-Cap Regulation in the Postal Sector," Journal of Regulatory Economics, Springer, vol. 24(1), pages 49-62, July.
    3. Etienne Billette de Villemeur & Helmuth Cremer & Bernard Roy & Joëlle Toledano, 2005. "Worksharing, Pricing and Competition in the Postal Sector," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Regulatory and Economic Challenges in the Postal and Delivery Sector, chapter 0, pages 139-161, Springer.
    4. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    6. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-256, November.
    7. Cremer, Helmuth & Roy, Bernard & Toledano, Joëlle & de Villemeur, Étienne, 2003. "Access Pricing and Imperfect Competition," IDEI Working Papers 217, Institut d'Économie Industrielle (IDEI), Toulouse.
    8. Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January.
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    Cited by:

    1. Bloch Francis & Gautier Axel, 2008. "Access Pricing and Entry in the Postal Sector," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-24, June.
    2. Michael D. Bradley & Jeff L. Colvin & Norma B. Nieto & Daniel J. Tobias, 2010. "Estimating the impact of a uniform price rule in a liberalized postal environment: the case of the United States Postal Service," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Heightening Competition in the Postal and Delivery Sector, chapter 13, Edward Elgar Publishing.
    3. Gautier Axel & Poudou Jean-Christophe, 2014. "Reforming the Postal Universal Service," Review of Network Economics, De Gruyter, vol. 13(4), pages 453-477, December.

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    More about this item

    Keywords

    Postal sector; Liberalization; Universal service; Access; Bypass; L51; L87; L32;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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