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What is an Unfair Burden? Compensating the Net Cost of Universal Service Provision

Listed author(s):
  • Jaag Christian

    (Swiss Economics and University of St. Gallen)

This paper discusses the net cost of universal service obligations and the potential burden they represent on the universal service provider. Specifically, it analyzes the situation in the postal sector after full liberalization. It considers various interpretations of what an unfair burden might be and discusses the competitive impact of corresponding compensation scenarios by means of a stylized theoretical model with endogenous entry and coverage decisions.

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File URL: https://www.degruyter.com/view/j/rne.2011.10.issue-3/1446-9022.1225/1446-9022.1225.xml?format=INT
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Article provided by De Gruyter in its journal Review of Network Economics.

Volume (Year): 10 (2011)
Issue (Month): 3 (September)
Pages: 1-32

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Handle: RePEc:bpj:rneart:v:10:y:2011:i:3:n:7
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  1. Valletti, Tommaso M & Hoernig, Steffen & Barros, Pedro P, 2002. "Universal Service and Entry: The Role of Uniform Pricing and Coverage Constraints," Journal of Regulatory Economics, Springer, vol. 21(2), pages 169-190, March.
  2. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
  3. 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, 05.
  4. De Donder, Philippe, 2006. "Access Pricing in the Postal Sector," IDEI Working Papers 319, Institut d'Économie Industrielle (IDEI), Toulouse.
  5. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  6. Crew, Michael A & Kleindorfer, Paul R, 1998. "Efficient Entry, Monopoly, and the Universal Service Obligation in Postal Service," Journal of Regulatory Economics, Springer, vol. 14(2), pages 103-125, September.
  7. Panzar, John C., 2000. "A methodology for measuring the costs of universal service obligations," Information Economics and Policy, Elsevier, vol. 12(3), pages 211-220, September.
  8. Christian Jaag & Urs Trinkner, 2011. "The interaction between universal service costing and financing in the postal sector: a calibrated approach," Journal of Regulatory Economics, Springer, vol. 39(1), pages 89-110, February.
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