Liberalization of the postal service market in Europe : entry with universal service and partial coverage

Beschorner, Patrick

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URN: urn:nbn:de:bsz:180-madoc-22360
Document Type: Working paper
Year of publication: 2008
The title of a journal, publication series: None
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L51 L41 L12 ,
Subject headings (SWD): Europäische Union , Post , Deregulierung
Keywords (English): regulation , liberalization , postal services
Abstract: In the advent of postal market liberalization in several European countries we expect that the incumbent operators anticipate entry by competitors who are not required to offer universal service, i.e. coverage of the entire country and uniform pricing. The market for postal service exhibits stronger network effects than in telecommunications because of limited interconnection. In the present paper we model entrants which can opt for a partial geographical coverage and who enter with a higher service quality than the incumbent. This allows to predict possible deterrence or accommodating strategies by the incumbent. We show that dependent on the shape of the network costs and the network effects entrants may either offer a low quality in order to mitigate competition or offer a higher quality in order to restrict the entrant's geographical coverage.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.

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