Worksharing, access and bypass: the structure of prices in the postal sector
This paper studies a liberalized postal market where entrants may offer end-to-end products or concentrate on one of the segments of the network. Absent effective bypass, entry does not appear to be a serious financial threat to the incumbent, even when the products are perfect substitutes. This is no longer true when the entrant offers cheaper service in delivery. Then, the universal service provider may loose the entire pre-sorted mail market. It is left with probably low volume demand from households and from firms with high preparation cost, and its financial viability may be jeopardized.
|Date of creation:||2007|
|Date of revision:|
|Publication status:||Published in Journal of Regulatory Economics|
|Contact details of provider:|| Postal: |
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- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
- Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January.
- Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-56, November.
- Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
- Billette de Villemeur, Etienne, et al, 2003. "Optimal Pricing and Price-Cap Regulation in the Postal Sector," Journal of Regulatory Economics, Springer, vol. 24(1), pages 49-62, July.
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