Service quality decisions for express delivery companies with learning effect

With the rapid development of express delivery industry, the service quality becomes a topic of interest for academic research. This paper extended the previous research by studying the learning effect in express delivery industry. We propose a two-period model to analyse how the learning effect would influence the service quality. We first examine the optimal decisions of a monopoly express company in two different scenarios, i.e., myopic and foresighted respectively. For each scenario, we characterise the optimal decisions and examine the impact of learning effect. We then extend the model into the case that there are two competing express companies and derive the firms' equilibrium decisions in the presence of service competition. We find the service quality is positively related to learning effect. We also discuss the impact of 'price war' on the development of the industry.