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Worksharing and access discounts in the postal sector with asymmetrics information

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Author Info
Joan Calzada Aymerich (Universitat de Barcelona)
Abstract

This paper analyses the optimal worksharing discount granted to mailers and entrants in a liberalized postal sector when there is asymmetric information about the Post Offices costs. When the regulator is unable to ascertain which part of the total cost of sorting has to be attributed to each sorting facility, the optimal access discount given to the entrants is set in a procompetitive way, thus facilitating the entry of firms that are less efficient than the Post Office. However, with the same asymmetry of information, the optimal worksharing discount given to the mailers is set to favor the Post Office, even when it is less efficient than the mailers in providing the sorting.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 112.

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Length: 41 pages
Date of creation: 2004
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Handle: RePEc:bar:bedcje:2004112

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
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L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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  1. Laffont, Jean-Jacques & Tirole, Jean, 1990. "Optimal Bypass and Cream Skimming," American Economic Review, American Economic Association, vol. 80(5), pages 1042-61, December. [Downloadable!] (restricted)
  2. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-41, June. [Downloadable!] (restricted)
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  3. Caillaud, Bernard, 1990. "Regulation, competition, and asymmetric information," Journal of Economic Theory, Elsevier, vol. 52(1), pages 87-110, October. [Downloadable!] (restricted)
  4. Laffont, Jean-Jacques & Tirole, Jean, 1994. "Access pricing and competition," European Economic Review, Elsevier, vol. 38(9), pages 1673-1710, December. [Downloadable!] (restricted)
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  5. Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January. [Downloadable!] (restricted)
  6. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Blackwell Publishing, vol. 44(2), pages 131-50, June. [Downloadable!] (restricted)
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  7. Nicolas Curien & Bruno Jullien & Patrick Rey, 1998. "Pricing Regulation Under Bypass Competition," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 259-279, Summer. [Downloadable!] (restricted)
  8. Joel S. Demski & David E.M. Sappington & Pablo T. Spiller, 1987. "Managing Supplier Switching," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 77-97, Spring. [Downloadable!] (restricted)
  9. De Fraja, Gianni, 1999. "Regulation and access pricing with asymmetric information," European Economic Review, Elsevier, vol. 43(1), pages 109-134, January. [Downloadable!] (restricted)
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  10. Michael A. Einhorn, 1987. "Optimality and Sustainability: Regulation and Intermodal Competition in Telecommunications," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 550-563, Winter. [Downloadable!] (restricted)
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