Competition and Regulation in the Postal and Delivery Sector
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Competition and Regulation in the Postal and Delivery Sector

  • Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

orldwide, postal and delivery economics has attracted considerable interest. Numerous questions have arisen, including the role of regulation, funding the Universal Service Obligation, postal reform in Europe, Asia and North America, the future of national postal operators, demand and pricing strategies, and the principles that should govern the introduction of competition. Collected here are responses to these questions in the form of 24 essays written by researchers, practitioners, and senior managers from throughout the world.
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Chapter 11: Pricing, Welfare and Organisational Constraints for Postal Operators

Philippe De Donder, Helmuth Cremer and Paul Dudley

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11. Pricing, welfare and organisational constraints for postal operators* Philippe De Donder, Helmuth Cremer, Paul Dudley and Frank Rodriguez 1. INTRODUCTION National postal operators providing universal service typically are integrated operators where all stages of production up to and including the sale of postal services to final customers are contained within a single company. In some countries, a number of business units may have been created within such companies, and there may also be reporting arrangements for accounting and performance purposes for these business units. Based on precedents from other network industries, the organisational structures of national postal operators are likely to come under increased regulatory review in the future to assess whether an alternative to current structures may be in the public interest, not least because of the opening up of postal markets to competition, which in some countries has led to full liberalisation. Changes in organisational structures have been seen by regulators in other sectors as a way to encourage competition and increase the transparency of pricing and contractual arrangements of national operators. This represents an area which to date has not been considered explicitly by the postal economics literature, although a number of related areas, such as the working of price controls, the analysis of the effects of market liberalisation and the pricing of access to postal networks, have been explored (Crew and Kleindorfer, 2006; De Donder, 2006; De Donder et al., 2006). Our chapter begins to examine some of the pricing and welfare economic questions...

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