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

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Author Info

  • Etienne Billette de Villemeur

    (Université Toulouse 1)

  • Helmut Cremer

    ()
    (Groupe de Recherche en Economie Mathématique et Quantitative, INRA
    Université Toulouse 1)

  • Bernard Roy

    (La Poste)

  • Joëlle Toledano

    (Ecole Supérieure d'Electricité)

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.

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Bibliographic Info

Paper provided by Institut National de la Recherche Agronomique, France in its series Working Papers with number 20183.

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Length: 67-85
Date of creation: 2007
Date of revision:
Publication status: Published in Journal of Regulatory Economics
Handle: RePEc:inr:wpaper:20183

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Related research

Keywords: POSTAL SECTOR; LIBERALIZATION; UNIVERSAL SERVICE; ACCESS; BYPASS;

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References

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  1. 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.
  2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
  3. 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.
  4. Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January.
  5. 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.
  6. 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.
  7. 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.
  8. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
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Citations

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Cited by:
  1. Francis Bloch & Axel Gautier, 2006. "Access Pricing and Entry in the Postal Sector," CREPP Working Papers 0606, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.

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