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Competition through Cooperation? The Case of the German Postal Market

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  • Toufic M. El Masri

    ()
    (Leuphana University Lueneburg, Germany)

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    Abstract

    How can small and medium-sized German postal providers ensure nationwide geographical coverage without the aid of the former monopolist? A closer look at the industry revealed that postal providers in Germany engage in different types of cooperation in order to expand their geographical coverage independently from the market leader. In order to shed light on the effects of cooperation, I conducted a theoretical analysis using a spatial economic model complemented by a brief game-theoretical discussion. Moreover, I provide the first descriptive and case study evidence from unique data collected in 2010 and 2011, within the framework of a German postal market survey. I found that small postal providers cooperate with each other in order to extend their geographical service area and to succeed in the market. Furthermore, I also found – in both the theoretical analysis as well as in the evidence – that there is a negative counter-effect stemming from this cooperation.

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    File URL: http://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifvwl/WorkingPapers/wp_286_Upload.pdf
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    Bibliographic Info

    Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 286.

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    Length: 37 pages
    Date of creation: Oct 2013
    Date of revision:
    Handle: RePEc:lue:wpaper:286

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    Web page: http://leuphana.de/institute/ivwl.html

    Related research

    Keywords: Cooperation; Competition; Germany; Network Industries; Postal Sector;

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    1. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    2. d'ASPREMONT, Claude & GABSZEWICZ, Jean J. & THISSE, Jacques-François, . "On Hotelling's "Stability in competition"," CORE Discussion Papers RP -385, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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