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Welfare and Pricing of Mail in a Communications Market

Author

Listed:
  • De Donder Philippe

    (Toulouse School of Economics)

  • Cremer Helmuth

    (Toulouse School of Economics)

  • Dudley Paul

    (Royal Mail Group)

  • Rodriguez Frank

    (Oxera)

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.

Suggested Citation

  • De Donder Philippe & Cremer Helmuth & Dudley Paul & Rodriguez Frank, 2011. "Welfare and Pricing of Mail in a Communications Market," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-24, September.
  • Handle: RePEc:bpj:rneart:v:10:y:2011:i:3:n:4
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    References listed on IDEAS

    as
    1. Philippe Donder, 2006. "Access Pricing in the Postal Sector: Theory and Simulations," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(3), pages 307-326, May.
    2. De Donder, Philippe, 2006. "Access Pricing in the Postal Sector," IDEI Working Papers 319, Institut d'Économie Industrielle (IDEI), Toulouse.
    3. Veruete-McKay Leticia & Soteri Soterios & Nankervis John C. & Rodriguez Frank, 2011. "Letter Traffic Demand in the UK: An Analysis by Product and Envelope Content Type," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-28, September.
    4. Armstrong Mark, 2008. "Access Pricing, Bypass and Universal Service in Post," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-16, June.
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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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