Innovation in the Swiss mail sector: deregulation versus liberalization

Christian Jaag
Authors registered in the RePEc Author Service: Urs Trinkner

No 9, Working Papers from Swiss Economics

Abstract: In this paper we discuss an incumbent postal operator?s incentives to invest in an innovation in the face of upcoming liberalization and deregulation of the letter market. Our contribution is a short description of recent innovations in the Swiss mail market and their interpretation in light of an illuminative yet tractable model. Following the literature, we distinguish between product and process innovation. We characterize competitive pressure by a reduction in the incumbent?s market share and an increase of his/her perceived price elasticity of demand due to consumers? switching to competitors. This may result in adverse incentives to invest in an innovation. Likewise, deregulation leads to increased entrepreneurial freedom on the operator?s side and possibly a lower burden of USO (universal service obligations), reflected in lower cost. This sustains incentives to invest in both product and process innovation.

Keywords: post; liberalization; privatization; regulation (search for similar items in EconPapers)
JEL-codes: H44 L52 (search for similar items in EconPapers)
Date: 2007-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in International Journal of Regulation and Governance 7(2), 147?156.

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