The Effect of Entry Regulation on Process Innovation in the Swiss Mail Industry
AbstractWe develop an industry specific model of price competition with product differentiation to analyze the effect of entry regulation on process innovation in the Swiss mail industry. We consider the four most prominent scenarios: regulated monopoly, end-to-end competition, worksharing without bypass, and worksharing with bypass. Based on model calibration with data from the Swiss letter market, we find that the incentives to invest in process innovation decrease with deregulation. However, even accounting for this fact, the efficiency gains from partial liberalization, i.e. worksharing, ensure an increase in social welfare.
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Bibliographic InfoArticle provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 144 (2008)
Issue (Month): I (March)
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end-to-end competition; entry regulation; mail industry; process innovation; worksharing;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
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