IDEAS home Printed from https://ideas.repec.org/a/bpj/rneart/v7y2008i2n3.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1446-9022.1146
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.2202/1446-9022.1146?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Axel Gautier & Manipushpak Mitra, 2008. "Regulation of an Open Access Essential Facility," Economica, London School of Economics and Political Science, vol. 75(300), pages 662-682, November.
    2. Philippe Donder & Helmuth Cremer & Paul Dudley & Frank Rodriguez, 2006. "Pricing and Welfare Implications of Alternative Approaches to Setting Price Controls in the Postal Sector," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Progress toward Liberalization of the Postal and Delivery Sector, chapter 0, pages 227-247, Springer.
    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, May.
    4. Laffont, Jean-Jacques & Tirole, Jean, 1994. "Access pricing and competition," European Economic Review, Elsevier, vol. 38(9), pages 1673-1710, December.
    5. E. Villemeur & Helmuth Cremer & Bernard Roy & Joëlle Toledano, 2007. "Worksharing, access and bypass: the structure of prices in the postal sector," Journal of Regulatory Economics, Springer, vol. 32(1), pages 67-85, August.
    6. De Donder, Philippe, 2006. "Access Pricing in the Postal Sector," IDEI Working Papers 319, Institut d'Économie Industrielle (IDEI), Toulouse.
    7. 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).
    8. Michael A. Crew & Paul R. Kleindorfer, 2005. "Competition, Universal Service and the Graveyard Spiral," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Regulatory and Economic Challenges in the Postal and Delivery Sector, chapter 0, pages 1-30, Springer.
    9. Mark Armstrong, 2001. "Access Pricing, Bypass, and Universal Service," American Economic Review, American Economic Association, vol. 91(2), pages 297-301, May.
    10. Armstrong, Mark & Doyle, Chris & Vickers, John, 1996. "The Access Pricing Problem: A Synthesis," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 131-150, June.
    11. Michael A. Crew & Paul R. Kleindorfer, 2006. "The Welfare Effects of Entry and Strategies for Maintaining the USO in the Postal Sector," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Progress toward Liberalization of the Postal and Delivery Sector, chapter 0, pages 3-22, Springer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kaniska Dam & Axel Gautier & Manipushpak Mitra, 2007. "Efficient Access Pricing and Endogenous Market Structure," Working Papers DTE 384, CIDE, División de Economía.
    2. 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.
    3. 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.
    4. Francis Bloch & Axel Gautier, 2017. "Strategic bypass deterrence," Journal of Regulatory Economics, Springer, vol. 52(2), pages 189-210, October.
    5. Kevin M. Currier, 2012. "Optimal pricing of postal services under endogenously determined entry," Economics Bulletin, AccessEcon, vol. 32(4), pages 3503-3511.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gautier Axel & Poudou Jean-Christophe, 2014. "Reforming the Postal Universal Service," Review of Network Economics, De Gruyter, vol. 13(4), pages 453-477, December.
    2. Claire Borsenberger & Helmuth Cremer & Philippe De Donder & Denis Joram & Bernard Roy, 2010. "Funding the cost of universal service in a liberalized postal sector," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Heightening Competition in the Postal and Delivery Sector, chapter 14, Edward Elgar Publishing.
    3. 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.
    4. David Besanko & Shana Cui, 2019. "Regulated versus negotiated access pricing in vertically separated railway systems," Journal of Regulatory Economics, Springer, vol. 55(1), pages 1-32, February.
    5. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    6. 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.
    7. Joan Calzada & Francesc Trillas, 2005. "The interconnection prices in telecomunications: from theory to practice," Hacienda Pública Española / Review of Public Economics, IEF, vol. 173(2), pages 85-125, June.
    8. David Mandy, 2007. "When Do Input Prices Matter For Make-Or-Buy Decisions?," Working Papers 0701, Department of Economics, University of Missouri.
    9. Joan Calzada, 2009. "Access charges under two-tier pricing," Journal of Regulatory Economics, Springer, vol. 35(3), pages 296-311, June.
    10. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
    11. Armstrong Mark, 2008. "Access Pricing, Bypass and Universal Service in Post," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-16, June.
    12. David Mandy, 2009. "Pricing inputs to induce efficient Make-or-Buy decisions," Journal of Regulatory Economics, Springer, vol. 36(1), pages 29-43, August.
    13. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.
    14. Riechmann, Christoph, 2000. "Strategic pricing of grid access under partial price-caps -- electricity distribution in England and Wales," Energy Economics, Elsevier, vol. 22(2), pages 187-207, April.
    15. Demetrius Yannelis, 2002. "On access pricing with network externalities," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(2), pages 186-190, June.
    16. Ku, Hyeon-Mo & Kim, Jae-Cheol, 1998. "Non-discriminatory access pricing for multiple entrants," International Review of Economics & Finance, Elsevier, vol. 7(2), pages 173-183.
    17. Lewis, Tracy R. & Sappington, David E. M., 1999. "Access pricing with unregulated downstream competition," Information Economics and Policy, Elsevier, vol. 11(1), pages 73-100, March.
    18. Jaag Christian, 2011. "What is an Unfair Burden? Compensating the Net Cost of Universal Service Provision," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-32, September.
    19. Inderst, Roman & Peitz, Martin, 2011. "Netzzugang, Wettbewerb und Investitionen," ZEW Discussion Papers 11-025, ZEW - Leibniz Centre for European Economic Research.
    20. Vogelsang, Ingo, 2000. "Regulation of Access to the Telecommunications Network of New Zealand: A Review of the Literature," Working Paper Series 3931, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rneart:v:7:y:2008:i:2:n:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.