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Welfare and Pricing of Mail in a Communications Market

Author

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  • Cremer, Helmuth
  • De Donder, Philippe
  • Dudley, Paul
  • Rodriguez, Frank

Abstract

We build a model where a postal incumbent offering single piece, transactional and advertising mail competes with postal entrants and with a firm offering an alternative medium. We solve for the optimal prices under various competition assumptions. We calibrate the model and provide numerical simulations in order to shed light on the impact of these assumptions on volumes and welfare levels.

Suggested Citation

  • Cremer, Helmuth & De Donder, Philippe & Dudley, Paul & Rodriguez, Frank, 2010. "Welfare and Pricing of Mail in a Communications Market," TSE Working Papers 10-148, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:22482
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    References listed on IDEAS

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    1. Philippe Donder & Helmuth Cremer & Paul Dudley & Frank Rodriguez, 2006. "Pricing and Welfare Implications of Alternative Approaches to Setting Price Controls in the Postal Sector," Topics in Regulatory Economics and Policy, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Progress toward Liberalization of the Postal and Delivery Sector, chapter 0, pages 227-247, Springer.
    2. Philippe Donder, 2006. "Access Pricing in the Postal Sector: Theory and Simulations," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(3), pages 307-326, May.
    3. Veruete-McKay Leticia & Soteri Soterios & Nankervis John C. & Rodriguez Frank, 2011. "Letter Traffic Demand in the UK: An Analysis by Product and Envelope Content Type," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-28, September.
    4. Armstrong Mark, 2008. "Access Pricing, Bypass and Universal Service in Post," Review of Network Economics, De Gruyter, vol. 7(2), pages 1-16, June.
    5. De Donder, Philippe, 2006. "Access Pricing in the Postal Sector," IDEI Working Papers 319, Institut d'Économie Industrielle (IDEI), Toulouse.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Christian Bach & Robert Edwards & Christian Jaag, 2023. "Postal Platform Pricing with Limited Consumer Attention," Working Papers 202318, University of Liverpool, Department of Economics.
    2. Philippe De Donder & Helmuth Cremer & Paul Dudley & Frank Rodiguez, 2011. "Optimal Pricing for Mail and Welfare Implications in a Communications Market," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Reinventing the Postal Sector in an Electronic Age, chapter 6, Edward Elgar Publishing.
    3. Bakhtieva, Dilyara & Kiljański, Kamil, 2012. "Universal Service Obligation and Loyalty Effects: An Agent-Based Modelling Approach," MPRA Paper 48549, University Library of Munich, Germany.

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