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Access Pricing and Entry in the Postal Sector

Author

Listed:
  • Bloch Francis

    (GREQAM, Université de la Méditerranée and Warwick University)

  • Gautier Axel

    (HEC, Université de Liège and CORE, Université Catholique de Louvain)

Abstract

In a fully liberalized postal market, two business models will be possible for a new postal operator: (1) access: where the firm performs the upstream operations and uses the incumbent's network for final delivery and (2) bypass where the competing firm controls the entire supply chain and delivers mails with its own network. The choice between access and bypass depends on the entrant's delivery cost relative to the access price. In this paper, we derive welfare maximizing prices for the incumbent operator and we show how these prices should be re-balanced when the entry method is considered as endogenous.

Suggested Citation

  • Bloch Francis & Gautier Axel, 2008. "Access Pricing and Entry in the Postal Sector," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-24, June.
    • Handle: RePEc:bpj:rneart:v:7:y:2008:i:2:n:3
    DOI: 10.2202/1446-9022.1146
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    Cited by:

    1. Keizo Mizuno & Ichiro Yoshino, 2015. "Overusing a bypass under cost-based access regulation: underinvestment with spillovers," Journal of Regulatory Economics, Springer, vol. 47(1), pages 29-57, February.
    2. Francis Bloch & Axel Gautier, 2017. "Strategic bypass deterrence," Journal of Regulatory Economics, Springer, vol. 52(2), pages 189-210, October.
    3. DAM, Kaniska & GAUTIER, Axel & MITRA, Manipushpak, 2007. "Efficient access pricing and endogenous market structure," LIDAM Discussion Papers CORE 2007004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Gautier Axel & Paolini Dimitri, 2011. "Universal Service Financing in Competitive Postal Markets: One Size Does Not Fit All," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-30, September.
    5. Kevin M. Currier, 2012. "Optimal pricing of postal services under endogenously determined entry," Economics Bulletin, AccessEcon, vol. 32(4), pages 3503-3511.

    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services

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