Entry and Competition in the Postal Market: Foundations for the Construction of Entry Scenarios

Helmuth Cremer, André Grimaud, Jean-Pierre Florens, Sarah Marcy, Bernard Roy and Joëlle Toledano

Journal of Regulatory Economics, 2001, vol. 19, issue 2, 107-21

Abstract: This paper presents a model of entry and imperfect competition, which is inspired by the product differentiation literature and incorporates facts pertaining to the postal sector. There are two operators: incumbent and potential entrant. The entrant offers only one of the products (commercial mail) with a specific technology and delivers only to part of the addressees (located in low cost areas). Its degree of coverage is viewed as a quality attribute; it affects demand and hence market share. The incumbent faces a USO while the entrant is an unregulated profit maximizing firm. To illustrate the potential applications of our approach, we provide some numerical simulations of entry scenarios. Copyright 2001 by Kluwer Academic Publishers

Date: 2001
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