Price Controls in the Postal Sector: A Welfare Analysis of Alternative Control Structures

Philippe De Donder, Helmuth Cremer, Dudley Paul and Rodriguez Frank
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Dudley Paul: Royal Mail Group
Rodriguez Frank: Royal Mail Group

Review of Network Economics, 2008, vol. 7, issue 2, 25

Abstract: Postal regulators set price controls in order to simultaneously ensure the provision of the universal service, promote competition and equity. We study the associated price control procedures in a model where the universal service provider offers both a single piece product and a business mail product and where entrants offer a bulk mail product. Our results from the numerical calibration of our model indicate that in the case where entry is confined only to access, a range of procedures appear capable of meeting these objectives. However, if bypass is available these trade offs become more costly.

Date: 2008
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Working Paper: Price Controls in the Postal Sector: A Welfare Analysis of Alternative Control Structures (2006)
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DOI: 10.2202/1446-9022.1148

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