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

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Author Info

  • 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

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File URL: http://hdl.handle.net/10.1007/s11149-007-9024-1
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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 32 (2007)
Issue (Month): 1 (August)
Pages: 67-85

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Handle: RePEc:kap:regeco:v:32:y:2007:i:1:p:67-85

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Web page: http://www.springerlink.com/link.asp?id=100298

Related research

Keywords: Postal sector; Liberalization; Universal service; Access; Bypass; L51; L87; L32;

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References

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  1. 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.
  2. 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.
  3. Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January.
  4. Billette de Villemeur, Etienne, et al, 2003. "Optimal Pricing and Price-Cap Regulation in the Postal Sector," Journal of Regulatory Economics, Springer, vol. 24(1), pages 49-62, July.
  5. Cremer, Helmuth, et al, 2001. "Entry and Competition in the Postal Market: Foundations for the Construction of Entry Scenarios," Journal of Regulatory Economics, Springer, vol. 19(2), pages 107-21, March.
  6. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-56, November.
  7. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
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Cited by:
  1. Francis Bloch & Axel Gautier, 2008. "Access Pricing and Entry in the Postal Sector," Review of Network Economics, De Gruyter, vol. 7(2), pages 3.

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