Pricing in competitive two-sided mail markets
Series
Advances in regulatory economics
ISBN
978-1-84720-507-0
Type
book section
Date Issued
2008
Author(s)
Editor(s)
Crew, Michael A.
Kleindorfer, Paul R.
Abstract
In our contribution, we analyze whether the traditional pricing concept
(sender pays principle) remains dominant in competitive postal markets. We divide the competitive postal market into a processing and delivery part, where a postal operator faces two kinds of customers: senders in the former and receivers in the latter part of the market. Based on the contributions by Laffont, Rey and Tirole (1998), Rochet and Tirole (2003), Armstrong (2006), and Panzar (2006) we develop a theoretical model with consumers' platform choice between two operators competing in linear upstream and two-part downstream prices and being interconnected by a symmetric access regime to P.O. boxes. Thereby, we extend the analysis of a delivery flat rate by Felisberto et al. (2006) and Friedli et al. (2006) to a competitive environment and assess optimum pricing schemes in market equilibrium.
(sender pays principle) remains dominant in competitive postal markets. We divide the competitive postal market into a processing and delivery part, where a postal operator faces two kinds of customers: senders in the former and receivers in the latter part of the market. Based on the contributions by Laffont, Rey and Tirole (1998), Rochet and Tirole (2003), Armstrong (2006), and Panzar (2006) we develop a theoretical model with consumers' platform choice between two operators competing in linear upstream and two-part downstream prices and being interconnected by a symmetric access regime to P.O. boxes. Thereby, we extend the analysis of a delivery flat rate by Felisberto et al. (2006) and Friedli et al. (2006) to a competitive environment and assess optimum pricing schemes in market equilibrium.
Language
English
Keywords
Pricing
Two-Sided Market
Liberalization
HSG Classification
contribution to scientific community
Refereed
No
Book title
Competition and Regulation in the Postal and Delivery
Publisher
Edward Elgar
Publisher place
Cheltenham
Start page
136
End page
149
Pages
14
Subject(s)
Division(s)
Eprints ID
38683