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Deregulation of Letter Markets and its Impact on Process and Product Innovation

Author

Listed:
  • Dietl Helmut

    (Institute of Strategy and Business Economics, University of Zurich)

  • Grütter Andreas

    (Institute of Strategy and Business Economics, University of Zurich)

  • Lutzenberger Martin

    (Institute of Strategy and Business Economics, University of Zurich)

Abstract

Does the European model of end-to-end competition or the US model of worksharing provide stronger innovation incentives for incumbent postal operators? We answer this question based on a two stage model with price competition and product differentiation. We find that incentives for process innovation in the upstream activities are stronger under end-to-end competition. Incentives for process innovation in delivery are stronger under worksharing, assuming that the entrant's demand under worksharing is higher than the decline in the incumbent's demand. Regarding product innovation, incentives depend on the access price.

Suggested Citation

  • Dietl Helmut & Grütter Andreas & Lutzenberger Martin, 2008. "Deregulation of Letter Markets and its Impact on Process and Product Innovation," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-16, June.
    • Handle: RePEc:bpj:rneart:v:7:y:2008:i:2:n:4
    DOI: 10.2202/1446-9022.1147
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    Citations

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    Cited by:

    1. Martin Maegli & Christian Jaag, 2013. "Competition and the social cost of regulation in the postal sector," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Reforming the Postal Sector in the Face of Electronic Competition, chapter 20, pages 294-305, Edward Elgar Publishing.
    2. Helmut M. Dietl & Urs Trinkner, 2008. "Developing Universal Postal Services in Latin America ? an Economic Perspective," Working Papers 0012, Swiss Economics, revised Nov 2008.

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