Worksharing, Access and Bypass: The Structure of Prices in the Postal Sector
19 Pages Posted: 12 Jun 2008 Last revised: 1 Sep 2016
Date Written: 2007
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.
Keywords: Postal sector, Liberalization, Universal service, Access, Bypass
JEL Classification: L51, L87, L32
Suggested Citation: Suggested Citation