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Worksharing, access and bypass: the structure of prices in the postal sector

  • Etienne Billette de Villemeur

    (Université des Sciences Sociales (Toulouse 1))

  • Helmut Cremer

    ()

    (Groupe de Recherche en Economie Mathématique et Quantitative, INRA
    Université des Sciences Sociales (Toulouse 1))

  • Bernard Roy

    (La Poste)

  • Joëlle Toledano

    (Ecole Supérieure d'Electricité)

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.

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File URL: http://gateway.isiknowledge.com/gateway/Gateway.cgi?&GWVersion=2&SrcAuth=INRA&SrcApp=INRA&DestLinkType=FullRecord&DestApp=WOS&KeyUT=WOS:000247464600004
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Paper provided by Institut National de la Recherche Agronomique, France in its series Working Papers with number 20183.

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Length: 67-85
Date of creation: 2007
Date of revision:
Publication status: Published in Journal of Regulatory Economics
Handle: RePEc:inr:wpaper:20183
Contact details of provider: Postal: 4, Allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex
Web page: http://www.international.inra.fr
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  1. Cremer, Helmuth & Roy, Bernard & Toledano, Joëlle & de Villemeur, Étienne, 2003. "Access Pricing and Imperfect Competition," IDEI Working Papers 217, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Cremer, Helmuth & Roy, Bernard & Toledano, Joëlle & de Villemeur, Étienne, 2004. "Worksharing, Pricing and Competition in the Postal Market," IDEI Working Papers 302, Institut d'Économie Industrielle (IDEI), Toulouse.
  3. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
  4. 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.
  5. 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.
  6. Sherman, Roger, 2001. "Optimal Worksharing Discounts," Journal of Regulatory Economics, Springer, vol. 19(1), pages 81-92, January.
  7. Cremer, Helmuth, et al, 2001. "Entry and Competition in the Postal Market: Foundations for the Construction of Entry Scenarios," Journal of Regulatory Economics, Springer, vol. 19(2), pages 107-21, March.
  8. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
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