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Sharing costs between a Service of General Economic Interest and Competitive Activities: The Example of the Postal Retail Network

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Author Info
Sebastien Lecou () (La Poste)
Bernard Roy (La Poste)
Abstract

The European Commission has produced precise rules governing the computation of the cost of services of general economic interest (SGEI). The Commission has adopted a fully distributed cost approach where the SGEI can bear a "reasonable" share of the common cost. We highlight a possible inconsistency issue between this state aid case law and the antitrust case law based on an incremental cost approach. We also show the difficulty introduced by the identification of the common costs, relying on the example of the network of a postal operator providing commercial services and fulfilling an accessibility obligation.

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Publisher Info
Article provided by Concept Economics in its journal Review of Network Economics.

Volume (Year): 7 (2008)
Issue (Month): 2 (June)
Pages: 309-324
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rne:rneart:v:7:y:2008:i:2:p:309-324

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Related research
Keywords: postal sector; state aid; cost allocation;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Faulhaber, Gerald R, 1975. "Cross-Subsidization: Pricing in Public Enterprises," American Economic Review, American Economic Association, vol. 65(5), pages 966-77, December. [Downloadable!] (restricted)
  2. Ronald R. Braeutigam, 1980. "An Analysis of Fully Distributed Cost Pricing in Regulated Industries," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 182-196, Spring. [Downloadable!] (restricted)
  3. Philippe Chone & Laurent Flochel & Anne Perrot, 2000. "Allocating and Funding Universal Service Obligations in a Competitive Network Market," Econometric Society World Congress 2000 Contributed Papers 0213, Econometric Society. [Downloadable!]
  4. Bolton, P. & Brodley, J.F. & Riordan, M.H., 1999. "Predatory pricing : strategic theory and legal policy," Discussion Paper 82, Tilburg University, Center for Economic Research. [Downloadable!]
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This page was last updated on 2009-11-16.


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