IDEAS home Printed from https://ideas.repec.org/h/spr/topchp/978-0-387-29744-6_3.html
   My bibliography  Save this book chapter

Profitability of the Universal Service Postal Provider Under Entry with Economies of Scale in Collection and Delivery

In: Progress toward Liberalization of the Postal and Delivery Sector

Author

Listed:
  • Gonzales d’Alcantara

    (University of Antwerp)

  • Bernard Amerlynck

    (EXPOST Consulting)

Abstract

We propose a model for a liberalized competitive postal market that has one Universal Service Obligation (USO) provider, the incumbent, and one entrant. In this model we take into account the existence of economies of scale in their collection and delivery activities. The study is intended to lead to conclusions about the impact of economies of scale on the postal market in various countries, as measured by mail delivery density, which is defined as the number of postal items delivered per person, per year, and according to the size of the population. We consider delivery technologies of operators in markets of different sizes, measured by both these criteria. Variable and fixed costs in the collection and delivery activities are determined by a structural cost model, which has the same form for the incumbent as for the entrant. In this latter model we will also pay attention to delivery technology parameters, which differ from country to country, such as the number of delivery points per route stop. Given a definition of the USO, assumptions about demand behavior, and the opening of the market to the entrant, the calibrated model will compute the impact of the ‘cream-skimming’ mechanism and the ‘graveyard spiral’ on volume, tariffs, market shares and the cumulative balance the entrant needs in order to finance the delivery network.

Suggested Citation

  • Gonzales d’Alcantara & Bernard Amerlynck, 2006. "Profitability of the Universal Service Postal Provider Under Entry with Economies of Scale in Collection and Delivery," 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 39-57, Springer.
    • Handle: RePEc:spr:topchp:978-0-387-29744-6_3
    DOI: 10.1007/978-0-387-29744-6_3
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

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


    Cited by:

    1. Christian Jaag & Urs Trinkner, 2010. "The interaction of universal service costing and financing in the postal sector: A calibrated approach," Working Papers 0019, Swiss Economics.
    2. Christian Jaag, 2007. "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(III), pages 261-282, September.
    3. Jaag Christian, 2013. "Price Regulation and the Financing of Universal Services in Network Industries," Review of Law & Economics, De Gruyter, vol. 9(1), pages 125-150, September.
    4. Cátia Felisberto, 2012. "The Relationship Between Competition and Incumbent’s Innovation," Journal of Industry, Competition and Trade, Springer, vol. 12(1), pages 21-46, March.
    5. Claire Borsenberger & Denis Joram & Clément Magre & Bernard Roy, 2010. "Cross- country comparisons of optimal mail delivery frequency," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Heightening Competition in the Postal and Delivery Sector, chapter 15, Edward Elgar Publishing.
    6. 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.

    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:spr:topchp:978-0-387-29744-6_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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.