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Welfare and Pricing of Mail in a Communications Market

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  • Cremer, Helmuth
  • De Donder, Philippe
  • Dudley, Paul
  • Rodriguez, Frank

Abstract

We build a model where a postal incumbent offering single piece, transactional and advertising mail competes with postal entrants and with a firm offering an alternative medium. We solve for the optimal prices under various competition assumptions. We calibrate the model and provide numerical simulations in order to shed light on the impact of these assumptions on volumes and welfare levels.

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Bibliographic Info

Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 601.

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Date of creation: 02 Apr 2010
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Publication status: Published in The Review of Network Economics, vol.�10, n°3, 2011.
Handle: RePEc:ide:wpaper:22459

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  1. Philippe Donder, 2006. "Access Pricing in the Postal Sector: Theory and Simulations," Review of Industrial Organization, Springer, vol. 28(3), pages 307-326, 05.
  2. Armstrong, Mark, 2006. "Access pricing, bypass and universal service in post," MPRA Paper 62, University Library of Munich, Germany.
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Cited by:
  1. Bakhtieva, Dilyara & Kiljański, Kamil, 2012. "Universal Service Obligation and Loyalty Effects: An Agent-Based Modelling Approach," MPRA Paper 48549, University Library of Munich, Germany.

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