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Incentives of Compensating USO Net Costs

In: Postal Strategies

Author

Listed:
  • Felix Gottschalk

    (Swiss Post Ltd)

  • Urs Trinkner

    (University of Zurich
    Swiss Economics)

  • Eva Zuberbühler

    (Swiss Economics)

Abstract

This chapter rebuts the widespread intuition that compensating the net costs of universal service obligations narrows the provider’s incentives to reduce its costs or achieve growth. An illustrative example and a numerical simulation show that net cost compensation implies that potential gains of efficiency and growth measures are shared between the universal service provider and the public, and therefore, the former has incentives to implement such measures while the latter benefits from paying lower compensations.

Suggested Citation

  • Felix Gottschalk & Urs Trinkner & Eva Zuberbühler, 2023. "Incentives of Compensating USO Net Costs," Topics in Regulatory Economics and Policy, in: Pier Luigi Parcu & Timothy J. Brennan & Victor Glass (ed.), Postal Strategies, pages 127-140, Springer.
    • Handle: RePEc:spr:topchp:978-3-031-25362-1_10
    DOI: 10.1007/978-3-031-25362-1_10
    as

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