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Peak-Load Pricing in Postal Services

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  • Crew, Michael A
  • Kleindorfer, Paul R
  • Smith, Marc A

Abstract

The peak-load pricing problem for postal service is addressed in practice primarily by means of service differentiation according to class of mail. The authors demonstrate that lower priority mail at peak times helps to ameliorate, but does not eliminate, the peak-load problem. They derive welfare-optimal, service differentiated prices under peak-load conditions for a diverse mail-processing technology. The authors show the relationship between this class of problems and the traditional natural monopoly peak-load literature. The paper discusses the implications of the theory for U.K. and U.S. postal service practice and policy. Copyright 1990 by Royal Economic Society.

Suggested Citation

  • Crew, Michael A & Kleindorfer, Paul R & Smith, Marc A, 1990. "Peak-Load Pricing in Postal Services," Economic Journal, Royal Economic Society, vol. 100(402), pages 793-807, September.
    • Handle: RePEc:ecj:econjl:v:100:y:1990:i:402:p:793-807
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    Cited by:

    1. Filipa Silva, 2012. "Priority and Non-Priority Services: Returning to the Origins?," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Multi-Modal Competition and the Future of Mail, chapter 22, Edward Elgar Publishing.
    2. Joan Calzada, 2009. "Access charges under two-tier pricing," Journal of Regulatory Economics, Springer, vol. 35(3), pages 296-311, June.
    3. Joan Calzada Aymerich, 2003. "Access by Capacity and Peak-Load Pricing," Working Papers in Economics 108, Universitat de Barcelona. Espai de Recerca en Economia.

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